Gary Bauler, Industrial Overview

CB RICHARD ELLIS

NAIOP TAMPA BAYANNUAL BROKER UPDATE :: 2011Industrial Market Overview

Gary A. Bauler, LEED APFirst Vice PresidentCB Richard Ellis

DEMAND FOR INDUSTRIAL SPACE IS DRIVEN BY:

International Trade - Import and Export

Manufacturing and Trade Inventories

Industrial Production

Source: American Association of Port Authorities

CONTAINER TRAFFIC AT US PORTS TEU’s 1990 to 2010

Source: Federal Reserve

TOTAL INDUSTRIAL PRODUCTION, CAPACITY & UTILIZATION

Source: US Census Bureau

MANUFACTURING AND TRADE INVENTORIES AND SALES

BUSINESS FORMATIONS

Source: CBRE Research, US Bureau of Labor Statistics

TAMPA BAY INDUSTRIAL SUBMARKETS

NET ABSORPTION (SF)

Source: CBRE Research

SAMPLE OF 3rd QUARTER ACTIVITY IN MARKET

Business type Requirement

VF Corp230,000 sf. Upgrade of facility and increased efficiencies

Core Mark 260,000 sf. Consolidation of Orlando and Tampa

Xpedx 215,000 sf. Upgrade and expansion

Thomas Cooley Law School 130,000 sf. Alternative use of a dock high building

Light Manufacture 75,000 sf. building purchase Pending

Injection Molding Company 123,000 sf. building purchase and expansion Pending

CONSTRUCTION (SF)

Source: CBRE Research

VACANCY

Source: CBRE Research

Source: CBRE Research

VACANCY BY BUILDING SIZE :: Tampa MSA

AVERAGE ASKING LEASE RATE

Source: CBRE Research

Source: Real Capital Analytics

INDUSTRIAL AVERAGE SALES PRICE PSF

Source: Real Capital Analytics, Inc.

DISTRESSED ASSETS BY PROPERTY TYPE

26% 28%

9%

16%

13%

6%2%

TENANT/OCCUPIER TRENDS

Portfolio optimization, more but smaller locations closer to the consumer as a result of higher fuel prices and the need for quicker deliveries

Tenants are moving up in quality and at reduced costs

Tenants are looking to restructure leases to lock in today’s rates

Tenants are checking Landlords/Developers credit for stability

Good deals for tenants/buyers with motivated owners

Lenders/special servicers holding up deals and are reluctant to face reality

LANDLORD/DEVELOPER TRENDS

Planned projects have been put on hold

Tighter credit restrictions by Landlords for requested tenant improvements

Landlords attempting to hold asking rates, but offering aggressive proposals

Landlords will to do longer term leases as they don’t expect short term improvement in rates

Owners that are upside down not willing to put money in TI’s or commissions

TAMPA BAYINDUSTRIAL MARKET