Denver Industrial Market Update 2013

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Summary of 2012 activity and predictions for 2013

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Denver Industrial Market Update 2013

  1. 1. Colorado Business EconomicOutlook Forum Paul Kluck, SIOR First Vice President CBRE
  2. 2. Regional Distribution: Percentage of U.S. Population Reached Within 500 MilesCBRE | Page 2
  3. 3. Industrial Supply & Demand Trends Metro Denver 6.0 10.0% 5.0 8.0% 4.0 5.3% 6.0% 3.0 Vacancy 3.2MSF MSF 4.0% 2.0 2.0% 1.0 0.0% 0.0 2006 2007 2008 2009 2010 2011 2012 YTD -1.0 -2.0% Completions Net Absorption VacancyCBRE | Page 3
  4. 4. Denver Industrial Rental Rates $7.00 Rental Rate $6.80 $6.60 $6.40 $6.20 $6.00 $5.80 $5.88 $5.60 $5.40 $5.20 2006 2007 2008 2009 2010 2011 2012 YTDCBRE | Page 4
  5. 5. 2012 Major Industrial TransactionsTENANT / BUYER ADDRESS SF TYPECoorsTek 4455 Table Mountain Dr 336,606 SaleRocky Mountain Bottle Co. 16200 Table Mountain Pky 227,132 RenewalGoodwill Industries of Denver 4355 Kearney St 221,677 New LeaseFedEx SmartPost 20321-20431 E 35th Dr 200,000 New LeaseFord Motor Company 4401 Florence St 186,078 RenewalOnTrac 5000 Lima St 151,929 New LeaseTolmar 1201 Cornerstone Dr, Windsor 144,293 SaleCondit Exhibition 5151 Bannock St 107,524 New LeaseNatural Grocers 4403 Table Mountain Dr 107,134 New LeasePrecision Building Systems 445-475 W 53rd Pl 100,750 RenewalCBRE | Page 5
  6. 6. Current Built-To-Suit Projects Niagara Water 319,158 SF Win Wholesale 250,000 SF Interline Brands 319,158 SF US Foods 400,000 SF United Natural Foods 553,757 SF Leprino Foods 350,000 SF Expansion Recently Completed Fiberspar 165,000 SF Recently CompletedCBRE | Page 6
  7. 7. Where are we in the Industrial Cycle? Phase II - Expansion Phase II - Expansion Phase III - Hypersupply Phase III - Hypersupply •Declining Vacancy •Increasing Vacancy •New Construction •New Construction •Rent Growth •Rent Growth Positive but Declining •Increasing Vacancy •Declining Vacancy •More Completions •Limited Construction •Rent Growth Negative •Rent Growth Negative or <Inflation Rate or <Inflation Rate Phase I - Recovery Phase I - Recovery Phase IV - Recession Phase IV - RecessionCBRE | Page 7
  8. 8. FORECAST• All the signs are pointing toward a rent spike in 2013 •Vacancy dropping •Increased Absorption •Very little, if any, spec development •Continued BTS activity •Tenants have been signing longer term leases to lock in low rates •Owners have been pushing rents on renewals CBRE | Page 8
  9. 9. Two-Buck Kluck’s 2012 Forecast TWO V The Buck Stops Here!CBRE | Page 9

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