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Cushman & Wakefield North American Industrial Year End Marketbeat
 

Cushman & Wakefield North American Industrial Year End Marketbeat

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    Cushman & Wakefield North American Industrial Year End Marketbeat Cushman & Wakefield North American Industrial Year End Marketbeat Document Transcript

    • MARKETBE EATINDUSTR RIAL SN NAPSHO OTNO ORTH AM MERICA YEAR-EN 2011 NDA Cu ushman & Wak kefield Researc Publication ch ECONOMIC OVERVIEW and deeclining vacancies. Leasing activit of 417.1 millio square feet ty on The North Am merican economy is weathering y (msf) i n 2011 is 20.5% higher than the 345.8 msf lease in 2010 and % e ed the storm desp the economic turmoil in pite the hig ghest level of act tivity since 2007 Increased dem 7. mand led to Europe. Business investment fr rom the private occupa ancy gains of 137 msf in 2011, a significant imp 7.4 provement fromm sector, coupled by an uptick in consumer d a year ago when only 14.1 msf of vaca space was ab ant bsorbed. With spending, mana aged to offset de eclines in improv leasing veloc and gains in occupancy, the national overall ved cityspending from all leve of governmen and the U.S. economy els nt e vacanc rate declined to 10.0% at year-end, an 80-bas point (bp) cy sisexpanded by 1.7% in 2011. Retail sale totaled a reco $4.7 trillion 2 es ord decrea from last yea As users and investors shake off lingering ase ar. ein 2011, a gain of 7.9% over 2010 and the largest perc % centage increase e doubts regarding the v s validity of the ec conomic recover demand is ry,since 1999. The manu ufacturing sector expanded for the 29th r expect to continue in 2012. tedconseccutive month an industrial production rose at an annual rate of nd o In Cannada, there is a c clear understand at the street level that ding t3.1% in the fourth qua arter, its tenth consecutive quar c rterly gain. occupiier activity is on the rise. The ovverall industrial vacancy rate fell lEven t though Canada’s overall GDP gr s rowth slowed in the fourth to 6.2% in 2011 from 6.7% in 2010. A % Absorption in mo markets, ostquarte of 2011 after expanding by 3.5% in the third quarter, this was er q s which has been gaining traction since early 2010, aver g raged about 4.4viewed as a pause, not a halt to anticipated growth. Canadian public d C msf pe quarter in the latter half of 20 er e 011. About 65% of theand pr rivate organizatio reported that they intend to invest $394.1 ons o absorpption in 2011 -- ttotaling 13.6 ms -- occurred in the second half sfbillion in construction and machinery and equipment in 2012, up 6.2% n % of the year and this momentum should carry into 201 12.from i investment in 20011. Conso olidations of multi-premise oper rations are displaacing space in many m markets, which is partially offsettting absorption gains fromNORT AMERICA – GDP GROW TH WTH compa anies that are exxpanding. Cost savings remain a high priority for r 6.0% % tenant In western Ca ts. anadian markets such as Vancouver, occupiers s, tend to favor ownersh as a means to control long-r costs. Land o hip o run 5.0% % and bu uilding sales are buoyant, with pr roduct shortage pushing up es 4.0% % selling prices. Tenants on the leasing s are finding v side value in reduced lease tterms and, wher possible, cont re traction or expansion flexibility. 3.0% % For the Mexican indus e strial real estate markets, the exxpanded 2.0% % presen of internatio developers, offering high-specification nce onal 1.0% % buildin has resulted in a larger grow in activity fo those ngs, wth or 2010 201 11 2012F 2 subma arkets where the new supply is l e located. By year--end, total class U.S. Canada a Mexico A dire ct industrial vacancy rate in Mex xico City had a 2 290-bp year-During 2011, the Mex g xican economy continued its rec c covery process, over-yyear improvemen decreasing to 7.6%. Overall vacancy for all nt, osurpasssing the maximu levels of eco um onomic activity observed before o classes showed a 210- annual decre s -bp ease and ended 2 2011 at 7.0%.the glo financial crisis. By the end of the fourth qua obal o arter, industrialoutput had increased 3.2% over the same period in th previous year t he r. TO FIVE NORT AMERICAN PORTS OP TH N ( % C H A N GE I N TE U T O T AL S)New f foreign direct inv vestment in Mex went up and overall fixed xico 25.0 0%investment showed an 8.0% increase. Export oriente industries n eddrove the growth of industrial employ yment, with the overall 15.0 0%unemp ployment rate st tanding at 5.0%. 5.0 0%The la ends in economic indicators support a growing atest positive tre -5.0 0%feeling of cautious opt g timism that the North American economy will npush tthrough the head dwinds caused by the European debt crisis. b -15.0 0%IMPROVING MARK FUNDAM KET MENTALS -25.0 0% LA/Long Beach, N New York/New Savan nnah, GA Vancouver (B BC) Oakland, CAThe U industrial ma U.S. arket has clearly transitioned int recovery in to CA Jersey 2009 2010 20112011 a demand accelerated significa and antly as market fundamentalscontin to fall more in-line with leve seen prior to the recession. nue elsThe U industrial ma U.S. arket continued to post strong leasing activity
    • U.S. – WESTERN REGION R OAKL LAND, CA Over vacancy rate declined slight to 9.2% at the rall es tly end of 2011. Small bu f usinesses are gain confidence in the economy ning y,GREA ATER LOS ANGELES, CA Great Los Angeles’ overall vacancy ter increas demand for smaller leases. This trend is particularly eviden sing r ntremain unchanged at 4.9% in 2011 and there are many indicators ned a m in the Oakland/Alamed and San Lean da ndro submarkets which s,that th region’s indus he strial market botttomed out in 2010. Four of the 2 e combin ctivity based on number of ned, saw 48.1% of the leasing acfive major markets recorded occupan gains and a slight uptick in ncy leases signed but only 39.3% of the to square feet leased. Strong otalrental rates. Investme activity continued to gain mo ent omentum and deman for quality spa has allowed landlords to push rents in some nd ace esales vvolume increased a whopping 41.2% from last year, totaling $1.66 subma arkets. While us sales activity remains slow, investor sales in ser ybillion in 2011. Although net absorpttion was positive in 2011, there e 2011 aalmost equaled t previous three years combin the ned. Slowwas a slight slowdown in market activ In the past twelve months, n vity. t market recovery is ex t xpected for the nnext two years, with growthrental rates showed some improveme and increase 2.0% year- ent ed accelerration expected in 2014 and 2015.over-y year. Vacancy ra are expecte to decline fur ates ed rther while rents swill co ontinue to trend upward, especially for class A product. d p PORT LAND, OR Ore egon’s economic recovery has a c allowed the industr market to ho steady, ready for expansion. The overall rial old .INLAN EMPIRE, CA The Inland Empire’s significant gains in leasing ND A t vacanc rate in Portlan decreased to 6.2% in fourth quarter 2011, cy nd oactivit and overall ne absorption in 2011 further str ty et 2 rengthened the from 77.0% last year. AAsking rental rate have leveled o a trend that es off,marke Demand in th ‘big box’ mark led to 28.1 msf of leasing et. he ket m is expe ected to continu until the mark tightens furt ue ket ther. In general,activit a 13.7% increase from last year and the largest amount of ty, the acttivity in the mar rket in 2011 has been steady wit much of it thleasing since 2007. Inc g creased demand, along with fewer move-outs, , coming from companie moving from one part of tow to another, g es wnled to a significant deccline in the overall vacancy rate, finishing 2011 at a expand and contrac ding cting, or choosin to renew. Bas on the ng sed8.0%, 300 bps lower than last year an the first time the vacancy rate nd tenant in the market,, the 100,000 sf plus market sho ts ould pick up infinishe a year in the single digits since 2007. Despite lower amounts ed s e 2012.of exissting available sp pace to choose from, healthy de f emand for all sizeeranges will keep overa vacancy rates low and absorp s all ption positive in SEATT TLE, WA An inc creased demand for warehouse space improvedthe cooming year. Seattle industrial mar e’s rket in 2011. Po activity, a dire driver for ort ect wareho ouse demand, is showing some improvements i container s inORAN NGE COUNTY CA At mid-year 2011, Orange County’s r flow, p particularly for o outbound traffic. Absorption rea . ached its highest tabsorp ption totaled poositive 1.4 msf, but instability in the global and t level siince 2007 and le easing by big box tenants is up 7 over the x 77%nation economy dro down industrial demand in the second half of nal ove o year. D Despite some se etbacks to the naational economy earlier in the ythe ye Net absorpt ear. tion totaled negaative 952,029 sf in the second year, G GDP growth in 2 2012 and 2013 s should continue to strengthenhalf, le eaving Orange County with an overall occupanc gain of 450,13 C o cy 30 export activity and wa t arehouse deman over the next 24 months. nd tsf for t year. While the shift at mid- the -year was a disappointment,2011 r remains the first year with occupancy gains sinc 2006. t ce LAS V EGAS, NV After witnessing a ve flat year in m r ery market activity,Conse equently, the cou unty’s average re ental showed a slight uptick s we exp pect lower vacancy rates over t next few yea This market’ the ars. ’sfrom a year ago for an annual growth rate of 3.3%, th first positive n he improv vement is depen ndent on continu job growth and an improved ued dannual growth since 2007. 2 econo my. Throughout 2011, vacancy and lease rates have remained t stable and the year ended on a more positive note for the first timeSAN D DIEGO, CA Lea asing in the San Diego industrial market reached D d since 2 2008. We are op ptimistic that the 2012 economi outlook for e ica total of 11.6 msf in 2011, the highes annual total sin 2006. Fourth 2 st nce the Las Vegas area willl show more po s ositive growth an stability in the nd equarte direct net abs er sorption of 187,0 sf dropped the direct 027 t market Year-to-date a t. analysis of net absorption, by su ubmarket andvacanc rate back belo the 10% mar and pushed an cy ow rk nnual net proper type, shows signs that distrib rty bution tenants a still moving areabsorpption to 467,072 sf, ahead of the 2010 total yet significantly 2 e out, w while manufacturing, light industr and flex spac show a rial cebehind pre-recession absorption level User sale acti d ls. ivity of 2.7 msf in positiv movement. ve2011 nnearly equaled that of 2010. Current asking rental rates of$10.32 psf/mo will like remain stable until overall va 2 ely e acancy returns to osingle- -digit levels. U.S. REGIONAL O OVERALL VAC CANCY RATES SSILICO VALLEY, CA Resurgence in the region’s economy was ON A n 14.0 %driven by social media cloud computi and software technology. As n a, ing e s 12.0 %the tech market rema ained stable in 20 there was an accelerated 010 10.0 %pace in leasing activity in 2011, resulti in positive ab y ing bsorption of 4.6msf. In the last year, the high-tech ov t verall vacancy rat declined by te 8.0 %270 bp from 16.4% to 13.7%. The te sector repre ps, t ech esented 71.8% ofo 6.0 %total 2 2011 industrial le easing activity. Venture capital will continue to V w 4.0 % 10.1% 10.2% 10.2% 11.4% 10.0% 7.3%nouris this steady gro sh owth. As quality space continue to tighten in y es 2.0 %the hig sought after Mountain View and Sunnyvale submarkets, ghly r w 0.0 % WESTERN NO ORTHEAST MIDWEST SOUTHWEST SOUTHHEAST NATIONALtech eexpansion will move into the San Clara and No nta orth San Jose REGION R REGION REGION REGION REGIO ONsubma arkets, which sho fuel modest rental rate increases. ouldCushm & 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 L Leasing activity fo the Indianapo industrial or olis market totaled just ov 9.6 msf lease in 2011, up from the 2010 t ver edCHICA AGO, IL The Chicago industrial market’s overa vacancy rate l all total o 7.6 msf. Mode bulk facilities continued to drive not only the of ern s ereache the lowest level in three year measuring 9.8 at year-end, a ed rs, 8% healthy leasing activity but also the im y y, mpressive gains sseen in120-bp decrease from this time last year. New leasin activity p m ng investm ment sales, whic ended 2011 w 7.8 msf sold to investors. ch with d ased 10.8% over 2010 and 30.3 msf were leased, compared toincrea m High ddemand and min imal availability o these facilities combined with of s, h27.4 m last year. Lar blocks of ava msf rge ailable class A sp pace are quickly Indiana stable economic climate, sug a’s ggest the industr market will rialdwindling in the area. Investment transactions reache 24.9 msf in ed contin ue to thrive, tho ough ongoing int ternational insta ability is likely to2011, the highest recoording since the end of 2008, an nearly tripled nd prolon the slightly slo ng ower pace of gro owth. Overall, leeasing activity isthe 9.2 msf recorded this time last year. Demand is expected to 2 e expect to continue at its current level, maintaining a moderate tedremain high for institu n utional investors looking for high quality assets h decline in vacancy, and rise in rental r e d rates, over the next year.and th hose spaces will come at a premium. Investmment sales in 20 are likely to maintain their a 012 accelerated pace of grow barring any major blows to Indiana’s econo wth, y o omy, or globalCLEVE ELAND, OH Th Greater Cleveland industrial market ended he capital markets.2011 w a significant increase in the overall vacancy rate, adjusting with t yto 9.6% as compared to 9.2% for the third quarter an 9.4% at the nd WAUKEE, WI The industrial mark in Milwaukee finished the MILWA e ketend of the fourth quar 2010. Activ on the sales side will have th f rter vity he year o a strong note.. Absorption rat remained positive for the on temost t traction heading into the first qu g uarter 2012 with the h sixth s straight quarter a the year end with occupa and ded ancy gains of 2.0 0manuf facturing sector leading the way. The oil and ga industry will be . as b msf an overall vacanc rate of 7.9%. Increased absor nd cy rption andthe pr rimary force beh this activity. Quality produc is becoming a hind ct produc ctivity were cert tainly positive in ndicators for the future of the epremium as prices wil continue to inc ll crease slowly. Although the A Milwauukee industrial m market, yet chall lenges and uncerrtainty remaindeman exists for new construction, activity will rem slow because nd w main concer rning Wisconsin overall busine climate. Polit n’s ess tical instabilityof the cost. has pla agued the state oover the past ye and experts b ear believe that potent investors ma be hesitant to sink capital into the market. tial ay o oDETR ROIT, MI Activity within the indu y ustrial market re emained steadythroug 2011. The ov gh verall vacancy closed at 16.5%, a decrease of KANSA CITY, MO F the Kansas C metropolita area, industria AS For City an al1.6% f from the fourth quarter 2010. Foreclosure activ remained F vity sales a leasing activity have continue to gain mome and ed entum andprevalent, which contributed to prope values rema erty aining close to highlig ht the demand f quality distrib for bution and flex s space from localall-tim lows. For 2012, we expect to see more bank me o k-owned and naational prospects The industrial market continu to suffer s. uesproperties hitting the market, howeve the mentality of some of er, y from a lack of available class A distribu e ution space. As more companiesthose banks will most likely toughen up. Many have come closer to t u c look to integrate Kans City into the distribution c o sas eir channels, theshorin up their financ and are expe ng ces ected to hold ou for better ut deman for such space continues to g nd e grow. With the o overall vacancyvalues on future forec s closures. The typpical buyer and tenant mentality t y rate at a respectable 7 t 7.6%, Kansas Cit is poised to ta advantage of ty ake fwill sh as many pros hift spects are comin to the unplea ng asant conclusion pent-u demand follow the recession. The struggling overall up wingthat th may have “m hey missed out” on all-time lows on certain types of a f econo my has kept dev velopers and owwners from any k kind oftransaactions. We exp pect that landlor and sellers will hold their rds w specula ative constructio but demand should encoura new on, ageground on sale/lease rates, and in turn tenants and buyers will come r n, constrruction in the cooming year and s several speculativ projects are veto grip with the fact that they may ne to pay more per square foo ps t eed e ot nearing the beginning phases of constr g ruction. With mmore prospectscompa ared to deals in previous years. vying f fewer buildin the transactions are becomi more for ngs, ing compe etitive and the need for new dev velopment incre eases daily.COLU UMBUS, OH The overall vacancy rate in Columbus’ industrial esector decreased from 11.0% to 10.8% at the close of the fourth r m % oquarte with overall absorption for th year of 3.8 ms However, er a he sf.fourth quarter leasing activity in the class A segment was reminiscent h g c t U.S. REGIONAL D DIRECT WARE EHOUSE NET RENTof the sluggish activity for the year, with a few large deals holding up y w d $7.0 00the maarket. At the close of the fourt quarter, there are no pending th e g $6.0 00specullative buildings scheduled to com on-line. Ren rates and deal s me ntalvelocit still have a wa to climb before dirt starts tur ty ay rning for the $5.0 00next s speculative wave e. $4.0 00ST. LOOUIS, MO A rec covery has begun to take place in the St. Louis n $3.0 00 $5.42 $4.83 $4.13 $3.75 $3.48 $4.25industtrial market. For the first time si r ince 2008, the market has mrecord positive ann absorption and the year end with an ded nual a ded $2.0 00 WESTERN NO ORTHEAST SOUTHWESTT MIDWEST SOUTHHEAST NATIONALoveral net absorption of 394,301 sf. The overall industrial vacancy ll n T REGION R REGION REGION REGION REGIO ONrate decreased for the first time since 2006, ending th year at 9.8%, e e hecompa ared to 10.0% in 2010. Althoug the decrease is a good sign n ghthat th market is gett back on track, the rate is st higher than he ting tillthe fiv ve-year average vacancy rate of 8.0%. v 8Cushm & 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 Whiile the overall va acancy has declinned, manufa acturing and flex sectors report minor increa x ted ases in vacancy.ATLA ANTA, GA Atlan saw a net increase in jobs in 2011, its first nta The wwarehousing/distr ribution sector h carried the o has other industrialsince 22007, bringing th unemployment rate down to 9.2% in he o sector reporting a de rs, ecline in vacancy and absorbing more than y, gNovem mber. Employme in Atlanta’s manufacturing se ent m ector has seen a 370,00 sf of industria space in the fo 00 al ourth quarter. CCorporations2.5% ppercent increase in jobs compar to one year ago while e red a have taaken advantage of favorable leas conditions. A sing Amazon.com ha astranspportation, wareh house & utilities has seen 1.3% in ncrease in jobs. comm itted to a $135 million investme into the Nas ent shville market.Industtrial leasing activ totaled 13.2 msf by year-end which is slightly vity d y Their ddistribution centters will occupy two fulfillment centers that ylagging total activity re g eported in 2010, while user sale activity es approximately 1.8 msf and will provide 1,300 new jobs by early total aincreaased by 26.0% ye ear-over-year. The overall vacan declined by ncy 2012. Griffin Technollogies, CEVA Lo ogistics, WMH, F FedEx and LKQ90 bps over the past twelve months, ending the year at 10.7%. s t absorb more than 1.5 msf of leasing activity over th last twelve bed g heMIAM FL The Miami-Dade industrial market closed the year with MI, l month albeit on shor hs, rter lease termss.optimism looking ahea to 2012. Leas activity incre ad sing eased 97.8% MEMP PHIS, TN After a sluggish start, aactivity in the seecond half of thefrom 3 msf at the en of 2010 to 7.3 msf at the clos of 2011, a 3.6 nd se year reebounded, and t year ended u with a healthy performance the up y cant improveme which bodes well for the return to marketsignific ent overal l. The market sa a 160-bp ann drop in vaca aw nual ancy, from 15.3%%fundam arket also enjoye healthy sales activity as South mentals. The ma ed h in 2010 to 13.7%. In 2011, rents have remained flat an low at an 0 ndFlorida continued to attract investors and tenants alik Sales activity a a s ke. averag rate of $2.50 psf. There is ant ge ticipation for a s strong 2012 withhincreaased 43.5% from 1.9 msf at the end 2010 to 2.7 msf at year-end. e good aactivity already uunderway and nu umerous inquirie from users esORLA ANDO, FL The Orlando industrial market closed 2011 ready to O o with la arge requiremen With an imp nts. proved economy Memphis will y,transittion into the nex phase of reco xt overy. While leas velocity in sing contin ue to attract ne tenants to the market becaus of its ew e sethe fin quarter fell sh nal hort of the volume set in the pr receding three compe etitive rents, locaation and abund dant quadramoda transportation al nquarte overall vacan extended th downward tra ers, ncy he ajectory capabi lities.prevalent throughout 2011 and absor rption remained markedly LOUIS SVILLE, KY As w predicted, st we trong fourth quaarter leasingpositiv for the third consecutive qua ve c arter. Although headwinds – and h d activity of 911,385 sf p y pushed total leas activity for t year to 4.1 sing thea 13.1% vacancy rate – persist, overall absorption of 1.5 msf in 2011 msf, abbove 4.0 msf for the first time si r ince 2008. As ussual, over two-saw th market reclaim 45.2% of the occupancy surre he endered betweeen thirds of the leasing acctivity for the qu uarter occurred in the2008 a 2010. Expec continued dec and ct clines in vacancy through 2012 as a wareho ouse/distribution sector. Indust trial absorption o over the past tencompa anies shake off li ingering doubts regarding the vaalidity of years h averaged jus over 2.0 msf p year, suggest that the has st per tingecono omic recovery an move to activ consider new space nd vely improv economy ha allowed the L ving as Louisville market to claw its way t yrequirrements. back to equilibrium. oJACKS SONVILLE, FL The Jacksonville industrial marke closed 2011 by T et b HAMP PTON ROADS, VA Industrial leasing activity on Hampton nextend the holding pattern establis ding shed in the previ ious quarter. Roads’’ Southside fared well, showing growth in absor d rption, but notOvera vacancy remained unchanged at 11.0% on the back of all e enough to offset the n h negative absorption on the Penin nsula. Thenominnally positive abs sorption, as market activity prov limited for ved overal l economy of th area is still gro he owing, although at a sluggishthe se econd consecutiv quarter. The year consequen proved a ve ntly pace. Profits have conntinued to slowly climb, but it has yet to affectyear o conflicting sign for the mark with heavily positive annual of nals ket, y the un employment rat which continues at 7.3%, the same as one te, eabsorpption of 1.2 msf and evidence of new tenant dem f mand early in the year ag Demand for distribution and warehouse spa should go. d aceyear te empered by lack kluster demand in the latter half Despite the f. increas as consumers continue to spend and the hou se s using marketslowdown in moment tum, cautious op ptimism remains the watch creeps back to norma s al.phrase entering 2012. Expect overall vacancy to approach 10.0% by e vyear-e as business confidence solidifies and market hesitation gives end c t s RICHM MOND, VA In the Richmond industrial market tenants leased t, dway to a steady increa in leasing vel o ase locity. more sspace for the ye than they vac ear cated for the firs time in severa st al years. Richmond com mpanies are now expanding their existing space. rCHAR RLOTTE, NC North Carolina was ranked the th best state w hird Next yyear will see a coontinuation of th positive abso he orption trend.for bu usiness by Forbes. The foreign in nvestment and headquarter With aalmost no new c construction, users will look for bargains. And rannouuncements contin to outpace most of the cou nue untry following when ffire-sale prices d don’t materialize —not nearly as many industria e s althe low cost of operation and availabi of quality lab As a result w ility bor. properrties ended up in foreclosure as expected in the dark days of n s eof the low cost of opeerations and access to the grow consumer wing 2008 — we should see some stabilizat e tion in the mark Something to ket.base in the greater Ch n harlotte metro area, we continu to see healthy a ue y watch will be the inter rest around the new interstate I-295interest from users an investors in the market and the surrounding nd t interch hange for the Me eadowville Techhnology Park in C Chesterfield.counti Of particular interest is the increase in dem ies. mand for 100,000 0 Couple with the construction of the new Amazon fu ed ulfillment centersf and larger propertie which is driving many compa es, anies to considerr there, robust activity iis expected.the co ounties immediat surrounding Charlotte, NC including the tely gnorthe counties of South Carolina. We expect to see build-to-suit ern S sdiscussions pick up in 2012 as cap rates compress, pu ushing values ofmoder distribution fa rn acilities closer to replacement value. o vCushm & 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 sburgh. In additiion, the amount of occupier sale activity of Pitts es skyroccketed 144% yea ar-over-year in 22011. Manufactu urers, inNEW JERSEY – CENT TRAL & NORTH HERN The Nort thern and particuular, continue to absorb existing spaces in both the low and o gCentr New Jersey in ral ndustrial market saw very healt activity in ts thy high-en of the spect nds trum. Hussey Co opper Ltd. purch hased a 237,500--2011, totaling over 23 msf in new le 3.3 ease transactions and exceeding s sf mannufacturing facilit on Ohio River Blvd. for its ow production ty wn2010 b 83.2%. The overall vacancy rate decreased 160 basis points by o r 1 purpos while Mitsub ses, bishi Electric Po ower Products, Inc. purchased afrom 2 2010 to 9.6%. Despite this, dire average askin rental rates D ect ng 50,000 facility in the Beaver County submarket. Ris fuel costs 0-sf e y singdecrea ased to $5.66 ps down $0.13 since 2010. Inves sf, s stment sales contin ue to impact the supply chain w e within the industrial market,activit also posted strong activity, inc ty creasing by 13.2% over 2010. effectiv forcing large manufacturers to reevaluate t vely e s their currentOver 9.3 msf were ac cquired this year the largest was KTR Capital r; s distrib ution structure.. Thus, the dema for warehou and use/distributionPartne acquisition of the fully leased 1.1-msf 8001 Industrial ers’ o d space iin excess of half a million square feet, is expecte to drive new f e edAvenu (Wakefern Fo Corporation new home). Strong leasing ue ood n’s speculaative constructio over the nex 24 months. on xtand investment activit helped cement 2011 as a turn ty naround year.With v vacancy decreas sing, tenants in the market will notice more n BALTI MORE, MD The Baltimore indu e ustrial market w healthy in wascompe etition for space and will have to adjust their de e o ecision timelines 2011 a its overall vacancy rate, at 10. as .6%, decreased 7 bps from 70accord dingly. As vacanc rates fall and competition beg to build for cy gins year-e nd 2010 and its year-to-date ovverall net absorpption wasspace, rents may slow rise in 2012. wly 965,05 sf. Year-to-da leasing and sa activity wer strong as it 55 ate ales re stood at 5.9 msf and 4 msf, respectiv 4.8 vely. In 2012, the market isLONG ISLAND NY The Long Island industrial marke saw 503,881 sf G T et s expect to continue to improve as it vacancy rate w steadily ted ts willof leas activity in th fourth quarter, which brough the year-end sing he ht decline and absorption is anticipated t continue on it positive trend e n to ts d.total t 3.4 msf, up 9.6 from last yea The overall vacancy rate to 6% ar. v Signific cant tenant mov vements in 2012 include: Restora ation Hardware’sdecreaased from 13.0% in the third quarter to 12.5% in the fourth % occupa ancy of 600,000 sf at 4000 Princ cipio Parkway Ea Life Sciences ast, squarte while average rents increased by 0.9% since last quarter to er, e d Logistiics, LLC occupan of 300,000 s at 8901 Snowd River ncy sf den$6.82 psf. The industr market is exp rial pected to remain stable in the Parkwa and Metro Lo ay ogistics’s 352,850-sf move-out a 7629 Gambrills atupcom months. ming Cove R Road.PHILAADELPHIA, PA The Philadelphia industrial market’s overall T BOSTO MA The Greater Boston in ON, ndustrial real est tate marketvacanc rate declined from 8.2% at th end of 2010 to 7.0% in the cy he o witnes ssed an increase in demand during 2011. The ma driver of this ain sfourth quarter of 2011, the lowest ov h verall vacancy for the market deman was in the ma nd arket for high te echnology space. Overall vacancy ysince 22001. Leasing acctivity increased by 27.1% from 2010 with 7.1 2 decline 0.5 percentag points from la quarter in th high ed ge ast hemsf of new activity, th highest annual total since 200 Overall f he 07. techno ology sector, reccording the large decrease in v est vacancy for allabsorpption numbers are well in the po a ositive for the se econd industr types. Overa vacancy for th industrial market recorded a rial all heconsec cutive year at 5. msf. Despite the increase in te .8 t enant demand, decline of 80 bps from last year to 17.7%. Asking rent rates have e m talrental rates remain de eflated at a curre asking rate of $4.91 psf, ent o also beegun to stabilize as direct net as e sking rental rates increased sdown from $5.10 psf last year at this time. After a dif fficult couple of slightly over last year b 0.6% and now stand at $6.37 psf. Rental y by w 7years, the market is heading into 2012 in the best sha since 2007. 2 ape rates i n the high techn nology market ex xperienced the most growth ofWith increased deman and no new speculative deve nd s elopments in the e any inddustrial type, up 4.0% from this time last year. RRents in thepipelin next year, the overall vacancy rate should co ne e y ontinue to trend manufa acturing market have decreased since last year and pricing for ddown in 2012. wareho ouse space was flat.PA I-8 81/I-78 DISTRIBU UTION CORRIDOR The overa vacancy rate allfor the fourth quarter of 2011 came in at 9.9%, the lo e r owest vacancysince 2 2007. Overall ab bsorption numbe ended the ye in the ers ear U.S. O OVERALL OC CCUPIER ACTI IVITYpositiv for the second consecutive year at 4.9 msf. With healthy leve ve W elof tenant demand com mbined with the lowest vacancy rate posted inLehigh Valley since 20 the need for new speculativ development h 006, r vebecam evident in 2011. For the first time since 2009 two speculativ me 9, ve msfprojec broke ground The larger one is a class A, 1.2-msf sustainabl cts d. le 384.44 351 53 351.53 295.40 345.97 417.05warehhouse and distrib bution center. 85.21 75.92 62 14 62.14 90.82 95.81PITTSBURGH, PA Th hroughout the region, lack of existing available rproduct in the range of 25,000 – 80,0 sf has fueled higher demand o 000 2007 2 2008 2009 9 2010 2011for substantial develop pable land parce suitable for build-to-suit field els LEASING A ACTIVITY USER SALES AC CTIVITYoffices to accommoda natural gas ex s ate xploration and extraction. eComp panies are seekin 10 to 15-acre sites with infras ng structure such asaroadwways and utilities access already in place. Among the recent land i g dacquissitions for this pu urpose was Che esapeake Energy Corp.’spurcha of a 10.2-acr parcel in Ever ase re rGreene Techno ology Park south 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. – SOUTHWES T REGION ST REGION U.S. – SOUTHWE WES STERN CANA ADADALLA AS/FORT WOR RTH, TX Improv local econom conditions ved mic Occup activity picke up speed in t second half o 2011, and this pier ed the of sduring fourth quarter led to a surge in leasing activity During 2011, g n y. positiv shift is expect to continue t ve ted through 2012. G Generally,leasing activity rose 32 g 2.4% totaling 25.1 msf. This level of activity is tenant are making oc ts ccupancy decisions with a greate sense of erthe lar rgest total since 27.9 msf were recorded in 200 It is also r 07. urgenc and focus on long-run cost co cy ontrol. In Albert a strong ta,13.3% greater than the five-year avera Improved le % age. easing activity led d energy sector is once again driving gro y owth and confid dence. Theto oveerall absorption of 6.5 msf, a rise over the appro e oximate negative e Petrole eum Services As ssociation of Caanada forecast a 10% year-over-absorp ption total of 40 00,000 sf recorde during 2010 and the highest ed a year riise in drilling act tivity in 2012 and both oil and co d ommodity priceslevel s since 11.1 msf in 2007. Demand was driven by an improving a are go ing up. This spells continued po ositive demand in Calgary and necono in 2011 as in omy ndustrial users continued to reb c build warehouse Edmon nton. Calgary’s a asset owners hav responded by announcing a ve yinventtories shed durin 2009. ng numbe of speculative developments t er e that will bring m more than three million square feet of new product to the industrial m n market over theHOUS STON, TX Almo every indust ost trial indicator in 2011 was next tw years. Edmo wo onton’s industrial market, which tends to lagpositiv as the year closed. The over vacancy rate across all ve rall Calgar ry’s, is now expe eriencing a prono ounced upswing in occupier gproducts fell to 7.7% after peaking at more than 10.0% in 2010. a % activity and is seeing e y evidence of expa ansionary deman nd.Overa absorption wa positive at 6.6 msf, the highes recorded tota all as 6 st alsince 22007 and on the heels of two ne e egative years. Leasing activity VANC COUVER, BC Th city saw impr he roved demand m momentum andfor the year was 18.4 msf, while total sales activity reached 11.5 msf; e positiv absorption in the latter half o 2011. Occupie still have ve of ersboth ffigures represent the highest tot since 2007. With substantia t tals al negotiaating strength an are seeking a much space fle nd as exibility asincrea ases in manufactuuring jobs this ye and strong overall jobs ear, o possib le through their lease term. Tha said, where fle r at exibility exists,foreca for 2012, loo for more new construction st ast ok w tarts in the tenant are also negot ts tiating shorter le ease terms. Inter in land has restupcom year as vaca space is abso ming ant orbed by expand companies. ding strengtthened and this is putting upward pressure on l land prices,On the whole, Housto is coming into 2012 with pos on sitive which have reached re ecord levels in some cases. Abso orption rose tomome entum, and shou see a good ye as this transl uld ear lates into the about 620,000 sf over the fourth quar and vacancy nudged r rter yindusttrial market. downw ward to 4.6% fro 5.0% at midy om year 2011.PHOE ENIX, AZ Net absorption totaled 6.1 msf, an im a mpressive jump CALG GARY, AB Driven largely by third n d-party logistics and distribution nfrom 3 msf in 2010 and the highest absorption level since 2006. 3.8 a l compa anies, along with oil and gas serv providers, tenant activity is h viceAbsor rption was bolste ered by several large warehouse e/distribution picking up in Calgary. Retail giant Targ Canada is bu g get uilding a 1.3-msfleases with Amazon, Gap and Home Depot. Phoenix market G D x distrib ution center on 80 acres just ouutside of Calgary the third such y, hfundammentals strengthhened in 2011 with a 76.1% incre w ease in leasing center in Canada. Ren rates are now experiencing modest upward r ntal wactivit over 2010, a 15.1% drop in ov ty 1 verall vacancy ra and average ates pressu and speculatiive construction is strong, with in excess of 3.0 ure nasking rental rates tha improved for the first time in three years. Big g at g msf exxpected to come to market in th next two yea The vacancy e he ars.box teenant demand was rampant in 2011 but supply of “mega” w o rate is 4.7%, down fro 4.9% one yea ago. om arwareh house buildings dwindled. Only a few properties can currently d EDMO ONTON, AB Edmonton has see a recent upsw in occupanc en wing cyaccommmodate a user needing 500,000 sf or more, wh may trigger 0 hich activity that is beginnin to generate e y ng expansionary dem mand. Becausespecul lative developme of big-box by year-end 2012 ent y 2. of its p proximity to For McMurray, Ed rt dmonton acts as a staging areaDENV VER, CO The ov verall vacancy ra in Denver has fallen 110 bps ate for ma assive oil sands p projects. Such pprojects tend to be huge inover t last twelve months, ending the year at 7.5% - the lowest the m scope and can have a b business time sp of 20 years o more. The pan orlevel s since fourth quar 2008. Leasin activity amou rter ng unted to almost outloo for industrial demand in Edmo ok onton, the capit of Alberta, is tal9.9 ms down 4.2% fr sf, rom 2010 levels but still 10.8% above the long- a strong given expectat g, tions of continue strength in oi prices. ed ilrun historical average of 8.9 msf. As overall market conditions ccontin to tighten, th weighted average asking rent have begun to nue he ts o CAN NADIAN OVER RALL VACAN CY RATESincrea up 4.8% year ase, r-over-year after a 1.1% increase in 2010. r e 12.0 0%Denve industrial ma er’s arket should tigh hten further in coming quarters c 10.0 0%if pres sent trends conttinue. 8.0 0%SALT LAKE CITY, UT Although 2011 remained sluggish after a slow T w 6.0 0%2010, Salt Lake industtrial market had increased mark activity in d ketboth leasing and sales due to the favoorable tenant ma arket conditions, , 4.0 0% 11.0%Leasin activity increa ng ased 11.3% over a remarkable 20 with the 010 4.6% 4.7% 5.6% 6.0% 6.3% 7.4% 8.4% 2.0 0%large 5 50,000-100,000 sf spaces experiencing the most accelerated t 0.0 0%deman This size sec nd. ctor will continu to be in dema through 2012 ue and Vancouver Calgar St. Johns Toronto ry o Ottawa Halifax Montreal Monctonand ha the shortest absorption rate on the market today. Building as a t remained about the same in square footage as in 2010 but theresales r n ewere 5 transactions versus 37 last ye 53 ear.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,
    • CENT TRAL CANAD DA ATLA ANTIC CANA ADAManuf facturing activity in Central Cana rebounded in the second y ada i Newfo oundland and Labrador outpaced all other regio from both an d ons nhalf of 2011, though it continued stre f ts ength depends, to a large extent t t, econo mic and job grow perspective in 2011 and tha story is wth e aton a sustained U.S. re ecovery. Econom news from th U.S. is mic he unlikelly to change in t near term. T $25-billion fe the The ederalencou uraging, suggestin that the GDP growth could outperform ng P o governnment shipbuildiing contract won by Irving Shipb n building will fuelexpect tations in 2012, which would he drive industrial demand in elp job and economic grow in Halifax and Nova Scotia for years to d wthmajor markets. come. However, even though Nova Scotia and New B n Brunswick saw a positiv turnaround in manufacturing activity in recen quarters, their ve n nt rInnovaative and creativ investment int existing facilit is another ve to ties labor m markets remain weak.reason behind the sec n ctor’s return to profitability. Som memanuf facturers are foc cusing on speciallized products and others on Newfo oundland and Labrador’s econom will continue to benefit from my e mgrowt sectors where profitability is more certain and, as such, they th e strong oil prices, and iinvestment in en g nergy infrastruct ture initiatives.are fin nding success. Lo ower-cost labor will continue to be a main o The H ebron project a alone contains an estimated 700- n -million barrelslocatio attraction, which has intensif economic de on fied evelopment of recooverable resour bring about $20 billion in rces that could bcompe etition among Canadian and No American markets. C orth m revenu to Newfound ue dland during the project’s 25-yea lifespan. This ar projec is expected to create 4,000 jo once it reach peak ct o obs hesEmplo oyment growth was driven by th public sector in 2011, w he produc ction of 170,000 barrels per day in 2018. Then there is the 0 yparticuularly in Quebec but it will take a rebound in private sector job c, e b $6.2-bbillion Muskrat Fa hydroelectri project ventur that, once alls ic regrowt to spur expan th nsionary demand in industrial rea estate. d al given t green light, w see Emera In construct a $ the will nc. $1.2-billionRefleccting improving fundamentals, de f emand momentu across um unders cable betwee Newfoundlan and Cape Bre sea en nd eton. The linkCanad markets picked up in the pa six quarters, showing marked dian ast d will br electricity fr ring rom the Churchi River in Labra ill ador to marketsstreng in the past tw quarters. Mo gth wo ontreal and Toro onto saw a in New England and Ea w astern Canada. WWhile New Brunswick will see cant increase in tenant activity with absorption of approximatelysignific w some m major capital proojects wind dow in 2012, inclu wn uding Potash1.5 ms and 2.0 msf, re sf espectively. While Ottawa’s abssorption is far Corp’s $1.7-billion Sus s ssex mine development and the $1-billion Point e tmore modest, it has remained positive in the past thr quarters, r ree Leprea nuclear plant refurbishment, growth should g a boost as au getmarkin a shift back in an expansion ng nto nary cycle potash production com on stream. New Brunswick and Nova h mes kMONT TREAL, QB Montreal saw conti inued strength in leasing activity n y Scotia should also see some pick-up in engineering an construction n ndand a growing desire by some tenants to own their own facilities. b s o activity as Irving Shipb y building gears up to produce 20 large combatAbsor rption was appro oximately 1.5 ms over the fourt quarter of sf th vessels under the massive shipbuilding contract. s g2011 - the second hig -- ghest level since early 2006. Businesses are ecautioously optimistic, even though the recognize the recovery’s ey efragile nature. The imp proved demand conditions drive by general en CAN ADIAN VACA ANCY VS. SUP PPLYbusine optimism sho carry well into the first half of 2012. The ess ould f 2 25 10.0%overal vacancy rate in Montreal has fallen from 9.8% to 8.4% over th ll n f hepast year. 2 20 8.0%OTTA AWA, ON Ottaw is Canada’s fourth largest cit and houses a wa f ty 15 6.0% msfmodes industrial mar st rket that focuses on the distribu s ution sector. 10 4.0%Activit has recently increased, but th increase is mo modest than ty he ore nseen in other regional markets, driven by the need to relocate and l n o 5 2.0%upgrad facilities or co de onsolidate. Some evidence of exxpansions is 0 0.0%occurrring. The gover rnment is a dominant business driver regionally 2004 2005 2006 2007 20 008 2009 2010 2011and a major contribut to Ottawa’s GDP growth. Ottawa’s vacancy tor O y NEW SUPPLY VACANC RATE CYrate has fallen to 6.3% from 6.6% one year ago. %TORO ONTO, ON Incr reased demand momentum was the story in the s elatter half of 2011, as pent-up demand consolidations of multiple- d, s HALIF FAX, NS While d demand was gen nerally weak acrross Halifax’slocatio operations an business optimism led to an expansionary on nd e distrib ution-based induustrial market in 2011, the shipb n building contracttindusttrial environment. While the high value of the Canadian dollar C secure a bright future for the econom and industria market. Some es e my alwas an impediment, creativity and inst n tincts for surviva led to many al upwar rental rate pre rd essure is being f felt, more on the expectation of e fsucces stories within the Toronto industrial market. Rental rate ss increas future dema than recent changes in unde sed and erlying demandpressu on big box space is on the rise and there is a real shortage ure fundammentals. It is exp pected that dema will improve at a very and eof larg blocks of spa in excess of 300,000 sf. This is one factor ger ace s modes pace over 201 but will gain steady speed as shipbuilding st 12,that w drive design-b will build and speculative developme in 2012. ent activity kicks in. Vacan rate rose to 7.4% in 2011 fro 5.3% one y ncy om year aggo.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 Greater Moncton is located at the B n The ye was also a ve positive year for other mark ear ery r kets. In spite ofgeograaphic centre of the Maritime Pro t ovinces and is th transportation he securit concerns in so ty ome northern c cities, new comp panies from USA Ahub of the region. Mo f oncton saw modderate demand strength across s and Euurope were revie ewing their scennarios to expand for example, in d; n2011 a can expect to benefit from the shipbuilding contract won by and t t b Ciudad Juárez, Avery h a 919,000-sf expansion at Lopez Mateos d had fIrving, as project-relat work gears up. Optimism ab ted u bout the general 2455. T second larg The gest industrial market in Mexico, the city ofecono and continued moderate gro omy owth in demand for industrial d Monte errey, had many new constructio completed, expanding its onsspace will mean development activity should increase over 2012. e large c class A inventory Monterrey’s s major metrop y. six politanOvera vacancy rate has fallen to 11.0 from 14.9% one year ago. all h 0% o subma arkets saw expan nded activity; folllowing its locati and labor ion availab bility advantages,, Apodaca subma arket still accounts for 40% ofST. JO OHN’S NEWFOUNDLAND Co ommodities cont tinue to see the tot market size, and had many la tal arge manufacturi operations ingstrong demand globally and this is fue g eling demand in the St. John’s t comple eted in the Milim Santa Rosa and Prologis Ap mex podaca parks.region Investment in the region continues unabated, in spite of globa n. aleconoomic uncertainty With the Hebr project unde y. ron erway and the Notwiithstanding the continued reco overy in the NNorthern Mexico$6.2-b billion Muskrat Falls hydroelectric project about to start, healthy F t y market it was the Ce ts, entral Mexico area which has th largest activit he typrovin ncial GDP growt is very likely. The market rem th mains tight at of commpanies looking to establish new operations. T Bajio region w The n,only 5 5.6% vacancy, maarginally up from 4.1% one year ago. m includiing the states o Guanajuato, Q of Queretaro and San Luis Potos sí, reflect the accelera ts ated integration of industrial hinterlands, fo n or examp the aerospac industry in Queretaro and the automotiv ple ce veCAN NADIAN VACA ANCY VS. NET ABSORPTIO T ON corrido Guanajuato-S Luis Potosí. Bombardier’s diverse leases at or San a Quere etaro Aerospace Park exemplify the former, while Cummins’ e 24 8.0% 226,0000-sf new plant at Circuito inteerior 130 in San Luis Potosí and n 18 6.0% Mazda and Volkswag a’s gen’s new plants in Guanajuato (which represen s nt 12 4.0% an ove US$ 1 billion iinvestment) are a testimony for the latter. er r msf 6 2.0% Mexico potential rea estate industrial developmen has substantia o’s al nt al upside the expansion of manufacturing industries an robust growt e; nd th 0 0.0% in logis stics operations continue. Supp is coming at attractive price s ply es -6 -2.0% and it is likely to f t further diversify in order to match a mor y, re 2004 2005 2006 2007 20 5 008 2009 2010 2011 0 sophistticated demand.. NET AB BSORPTION VACAN NCY RATE Overa economic fu all undamentals are stable. If pe e ending structura al reform fostering pro ms oductivity growt and investment are passed by th bMEXI CO the ne government, which will be e ew elected in July, t local demand the could join internatio onal demand to support incr o reased industria alThe st trength of the cu urrent economic upturn in Mexico has been c activity y.limited by that of the United States, particularly for in d p ndustrial marketts.This is a result of the tight links betwe the two nat s een tions, where the MEXI ICO RENTAL VS. VACANC RATES (CLA A) CY ASSMexican economy is cyclically synchro c onized with the United States, $6.00 20.0%especi ially for manufac cturing productio Overall vaca on. ancy for all $5.50 16.0%classes stood at 7.0% at year-end, dow 210 bps from last year. The s wn mCuaut titlán and Toluca submarkets we the most act a ere tive, and togethe er $5.00 12.0% psf/yrthey rrepresent 57% of total transactio as measured in square feet. ons, d $4.50 8.0%The ge eneralized need for logistics speecialization and efficiency drove e $4.00 4.0%the coonsistently high growth of transa g actions involving location trade- g $3.50 0.0%offs. Specifically, tenan are increasing willing to pay a premium for nts gly y r 20 009 2010 201 11a locattion near the de ensest area of the city or with im mmediate access sto the main roads. The former is exem e mplified by Nauc calpan, DIRECT GR ROSS RENTAL RA ATE VACA ANCY RATETlalneepantla and Vallejo-Azcapotzalco submarkets’ hig rental rates, o ghwhile dynamic San Ma artin Obispo area in Cuautitlán provides a ptestim mony for the latte as exemplifie by Office Dep er, ed pot’s, OXXO’s,and UPS’ new leases in this area. O’D Donnell Logistics and Tres Ríos sare otther industrial paarks growing in view of the adva v antages provided dby Cuautitlán’s hub ro Contrasting, Toluca submarket has been ole.growin following the advantages arising from the gre ng eater commercia alinteracction between manufacturers an their distributors, standing m ndout as a cost-effective location. s eCushm & 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 ESUNIT TED STATES DIRECT OV VERALL YT TD YTD YTD YTD DIRECT ASKINGMARKET NAME T TOTAL VACANCY VACANCY LEASIN NG USER UNDER NEW OVERALL NE T RENTAL RATES INVENTORY RATE RATE ACTIVIT TY SALES CONSTRUCTION CO ONSTRUCTION NET ABSORPTION T MF WDGreater Los Angeles, CA 1,068,388,222 4.5% 4.9% 36,742,0 24 7,811,656 1,005,757 1,863,499 2,164,172 $5.50 $6.18 mpire, CAInland Em 411,062,485 7.4% 8.0% 28,135,5 03 4,246,926 5,783,467 2,307,000 13,895,943 $4.64 $4.02Orange C County, CA 274,927,500 6.1% 6.3% 10,776,6 32 3,233,380 26,000 0 450,130 $7.26 $6.31San Diego, CA 193,470,887 9.8% 10.4% 11,595,0 61 2,662,682 123,400 211,976 555,002 $7.80 $7.80 alley, CASilicon Va 243,696,851 10.4% 10.8% 789 13,483,7 3,191,921 213,000 1,045,000 4,579,938 $8.37 $5.47Oakland, CA , 141,271,437 8.3% 9.2% 7,050,1 54 1,297,239 0 0 1,394,951 $5.75 $4.49Portland , OR 177,536,588 5.9% 6.2% 3,221,8 24 1,657,888 150,573 413,700 1,494,147 $4.19 $4.81Seattle, W * WA 129,845,008 8.4% 9.1% 6,965,8 50 807,192 0 0 1,720,170 $4.66 $4.75Las Vegas, NV * 102,614,632 15.0% 15.0% 7,254,9 88 716,909 0 0 (851,492) $6.42 $5.16WESTE ERN REGION 2,742,813,610 6.9% 7.3% 25 125,225,82 25,625,793 7,302,197 5,841,175 25,402,961 $6.19 $5.42Chicago, IL , 1,147,931,092 9.4% 9.8% 30,305,9 31 10,620,124 1,287,100 3,419,628 10,152,194 $3.67 $3.94Cleveland OH * d, 425,395,458 9.4% 9.6% 3,372,2 54 5,475,647 596,000 992,735 1,375,422 $0.00 $3.31Columbu OH * us, 241,622,684 10.6% 10.8% 4,574,1 74 N/A N/A N/A 3,750,715 $4.64 $3.65Detroit, MI * 331,986,714 16.0% 16.5% N/A N N/A 339,435 0 8,353,863 $4.06 $4.07St. Louis, MO * , 223,186,034 9.7% 9.8% 5,331,6 47 1,017,550 227,000 0 394,301 $3.50 $3.77Kansas C MO * City, 198,543,085 7.4% 7.6% 3,226,8 42 2,437,568 1,893,637 453,598 190,674 $6.18 $4.15Indianap olis, IN * 212,996,580 7.8% 8.2% 9,640,6 39 2,412,901 623,514 1,782,980 6,085,197 $2.20 $2.94Milwauke WI * ee, 194,960,237 7.8% 7.9% 4,359,2 97 5,101,395 756,178 994,300 1,994,836 $4.04 $3.73MIDWE EST REGION 2,976,621,884 9.9% 10.2% 84 60,810,78 27,065,185 5,722,864 7,643,241 32,297,202 $3.95 $3.75Atlanta, G GA 514,010,633 10.6% 10.7% 13,190,3 10 4,108,184 583,800 1,654,884 9,041,615 $3.41 $3.38Miami, FL L 161,496,963 8.0% 8.1% 7,302,5 26 550,821 0 0 2,292,704 $3.94 $4.84Orlando, FL , 106,093,475 12.4% 13.1% 4,545,1 92 825,273 76,158 0 1,485,385 $4.02 $4.18Jacksonv FL ville, 100,551,387 10.9% 11.0% 2,534,8 59 451,679 0 764,874 1,181,106 $3.09 $3.52Charlotte, NC * 204,055,263 15.9% 16.5% 6,575,0 31 N/A 463,128 732,320 3,037,454 $2.52 $3.04Nashville TN * e, 159,225,324 11.2% 12.6% 4,083,6 67 562,238 1,951,000 0 2,538,129 $3.65 $3.65Memphis TN * s, 173,447,131 13.3% 13.7% 6,635,1 44 0 879,000 0 2,870,810 $0.00 $2.43Louisville KY * e, 126,285,650 7.0% 7.4% 4,131,5 24 526,111 264,000 467,000 1,939,540 $3.14 $3.30Hampton Roads, VA * n 116,518,488 7.8% 8.2% 4,164,1 60 N/A 15,908 227,123 (181,243) $4.85 $4.79Richmon VA* nd, 108,218,325 10.9% 11.1% 4,012,9 25 N/A 117,200 0 573,121 $3.56 $4.16SOUTH HEAST REGION 1,769,902,639 11.0% 11.4% 38 57,175,33 7,024,306 4,350,194 3,846,201 24,778,621 $3.14 $3.48New Jers - Central sey 326,590,337 8.8% 9.6% 13,394,4 63 1,012,017 1,050,488 546,721 6,072,169 $5.11 $4.27New Jers - Northern sey 284,172,693 8.8% 9.5% 9,992,0 49 1,321,424 810,350 356,016 354,717 $4.70 $5.73Long Island, NY 126,195,121 12.1% 12.5% 3,407,4 77 1,592,620 702,044 0 (62,415) $7.10 $6.68 orPA I-81/I-78 Distribution Corrido 216,924,542 9.5% 9.9% 6,624,4 83 700,000 2,508,800 947,000 4,921,510 $3.55 $3.86 phia, PAPhiladelp 276,900,026 6.6% 7.0% 7,077,6 27 935,823 1,100,000 966,336 5,793,242 $4.15 $4.34Pittsburg PA * gh, 140,280,668 7.5% 7.6% 2,588,4 66 2,199,157 272,622 442,127 1,799,246 $3.93 $4.46Baltimore MD e, 196,071,928 10.3% 10.6% 5,948,1 92 1,617,740 1,292,000 0 965,055 $0.00 $4.51Boston, M MA 161,009,618 16.7% 17.7% 5,689,5 17 1,065,844 117,200 137,000 573,221 $5.51 $5.17NORTH HEAST REGION 1,728,144,933 9.6% 10.1% 74 54,722,27 10,444,625 7,853,504 3,395,200 20,416,745 $4.88 $4.83Dallas/Fo Worth, TX ort 513,733,003 11.7% 12.1% 25,128,5 54 2,533,981 1,952,992 1,781,986 6,457,822 $3.35 $3.42Houston TX n, 350,539,239 7.5% 7.7% 742 18,431,7 8,023,456 2,302,095 1,905,443 6,615,768 $3.93 $4.28Phoenix, AZ , 264,040,207 12.3% 12.9% 15,603,9 57 2,601,909 194,262 631,473 6,134,383 $5.52 $5.52Denver, C CO 226,034,640 7.1% 7.5% 718 9,869,7 1,964,140 334,340 755,751 3,107,786 $4.44 $4.35Salt Lake City, UT * e 105,408,623 8.6% 8.6% 4,463,2 87 1,536,958 1,393,404 975,096 835,249 $3.79 $4.66SOUTH HWEST REGION 1,459,755,712 9.9% 10.2% 58 73,497,25 16,660,444 6,177,093 6,049,749 23,151,008 $4.60 $4.13U.S. TO OTAL- ALL MARKET TS 12,142,909,319 9.3% 10.0% 417,054,9 919 95,813,003 34,212,096 29,586,448 137,425,942 $4.56 $4.25U.S. TO OTAL- C&W MARKET TS 8,055,870,513 8.7% 9.2% 306,346,7 799 69,113,529 23,556,553 20,455,345 94,376,798 $4.90 $4.58NOTE: On m a rke ts with o ve r 100M S F o f indus tria l inve nto ry is inc lude d in this a na lys is . Th U.S to ta l inc lude s a ll m a r ts . * Allia nc e M a rke ts nly he rkeR e nta l ra t s re fle c t we ighte d a ve ra ge a s king $ ps f/ye a r te e M F =M a nufa c turing W/D = Wa re ho us e /Dis tributio nCushm & 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 ASKING G MARK KET TOTAL L VACANCY LEASING UNDE R NEW N OVERALL O RENTAL RATES S INVENTORY Y RATE ON ACTIVITY CONSTRUCTIO CONSTRUCT TION NET ABSO ORPTION NET TMI* * Vancouver 189,050,525 4.6% 12,679,432 2,104,394 4 1,090 ,880 1 ,462,284 $8.35 $3.68 8 Calgary y 109,119,237 4.7% 4,800,121 1,373,79 5 662 ,677 904,654 $7.85 $3.27 7 Toront to 838,726,334 6.0% 19,915,858 2,247,57 1 1,988 ,946 6,150,383 6 $4.83 $3.29 9 Ottaw wa 21,636,205 6.3% 1,016,553 43,00 0 108 ,752 178,954 $8.05 $4.27 7 Montreal 279,640,575 8.4% N/A 746,50 0 1,330 ,500 4,644,048 4 $5.00 $3.48 8 Fredericton 397,475 6.6% N/A 0 0 (3,742) $7.33 $4.40 0 Saint Jo ohn 269,128 14.1% N/A 0 79 ,000 47,985 $6.47 $2.87 7 Monct ton 2,162,359 11.0% N/A 0 0 82,749 $5.85 $2.83 3 Halifax x 6,534,070 7.4% N/A 0 0 (26,474) $6.98 $4.24 4 St. Joh ns 2,896,309 5.6% N/A 160,00 0 127 ,200 106,446 $8.69 $2.45 5 CANA ADA TOTAL 1,450,432,217 6.2% 38,411,964 6,675,26 60 5,387 7,955 13 3,547,287 $5.62 $3.39 9 * TA XE M A INTENA NCE A ND INSURA NCE ES, MEX XICO OV VERALL YTD YTD YTD DIRECT ASKINGG MARKET TOTAL VAC CANCY LE EASING USER UNDER NEW N ET RENTAL RATESS INV VENTORY RATE AC CTIVITY SALES UCTION CONSTRU CONS STRUCTION ALL CLASSES S Mexico City o 131 1,053,171 7.0% 7,0 025,423 17,216 1 2,4 493,945 928,620 $5.52 2 Monterrey 113 3,331,862 8.9% 2,8 844,872 70,785 7 N/A N/A $5.33 3 Tijuana a 63 3,536,875 6.0% 1,0 050,274 83,121 8 N/A N/A $5.50 0 MEXIC (selected ma CO arkets) 307 7,921,908 7.5% 10,9 920,569 17 71,122 2,493,945 928,620 $5.43 3NORT 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 Director 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,