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2010 Recap Third consecutive year of negative absorption

INDUSTRIAL. 2010 Recap Third consecutive year of negative absorption Warehouse/distribution vacancy stabilized Construction remained nonexistant.

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2010 Recap Third consecutive year of negative absorption

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  1. INDUSTRIAL • 2010 Recap • Third consecutive year of negative absorption • Warehouse/distribution vacancy stabilized • Construction remained nonexistant

  2. IndustrialEd Brown, CCIM, SIORNAI Carolantic Realty2011 Triangle NC-CCIM Commercial Real Estate Market ForecastNetworking. Education. Technology.

  3. TRIANGLE INDUSTRIAL OVERVIEW Ed Brown, SIOR, CCIM NAI Carolantic Realty March 16, 2011 • LOOK BACK • TODAY • PREDICITIONS

  4. SUBLEASE SPACE

  5. ABSORPTION 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q

  6. LEASING ACTIVITY IN THE THREE LARGEST SUBMARKETS 2006 2007 2008 2009 2010

  7. ADVERTISED RENTAL RATES Annualized 200020052010Increase 900 Aviation Pkwy (30’) $3.75 $3.50 $4.00 0.67% Edinburgh Place (30’) $4.10 $4.10 $5.25 2.8% Bedford Place (30’) $4.50 $3.75 $5.25 1.7% Tri-Center SouthVIII (30’) $4.25 $4.25 $4.95 1.6% Tri-Center South II (24’) $3.90 $3.75 $4.75 2.2% Keystone A (24’) $4.15 $3.50 $4.50 0.8% Walnut Creek III (24’) N/A $4.55 $4.95 2.0% Greenfield 800 (30’) N/A $4.25 $4.95 3.3% 1.88% AVERAGE

  8. TRIANGLE INDUSTRIAL OVERVIEW • LOOK BACK • TODAY • PREDICITIONS Ed Brown, SIOR, CCIM NAI Carolantic Realty March 16, 2011

  9. TOTAL VACANCY & SIZE DESCRIPTION%VACANTSIZE/VACANT Total Direct 20.8% 25.3m / 5.2 m Total w/o Durham Tobacco 17.7% 24.1m / 4.3 m Direct & Sublease 24.1% 25.3m / 6.1 m

  10. SUBMARKET VACANCY & SIZE DESCRIPTION%VACANTSIZE/VACANT Largest Submarket – RTP 9.3% 10.3m / 960k 2nd Largest Submarket – East Wake 24.6% 5.2m / 1.2m 3rd Largest Submarket – North Raleigh/US1 34.1% 3.9m / 1.3m

  11. Lower Costs / Trade Up MOVE OUT OFMOVE IN TO Beavex $6.95/sf Flex to $4.50/sf Warehouse 31,000SF Eaton $6.95/sf Flex to $4.50/sf Warehouse 42,000SF Coca-Cola 1950’s Facility to Modern 30’ Clear 250,000SF Document Storage Old 18’ Clear to Modern 30’ Clear 100,000SF Equipment Rental $7.50/sf Flex to $3.75/sf Warehouse 40,000sf

  12. MARKET ACTIVITY

  13. NEGATIVE ASORPTION 2011 Keystone 88,000sf Two tenants downsize Imperial Center 40,000sf Closes 180,000sf New Sublease Tri-Center South 85,000sf Sublease goes direct 32,000sf move to Creedmoor Tri-Center North 170,000sf direct to shadow space Weck Drive 168,000sf recycler downsizes 2100 Harrod 89,000sf moves out 681,000sf

  14. BUILDING SALES COMPS AddressSize$/SF Date 8605 Ebenezer Church Raleigh, NC 81,600sf $45.95/sf 05/25/10 323 Park Knoll Durham, NC 128,000sf $43.61/sf 12/22/10 4400 Emperor Blvd. Durham, NC 182,165sf $41.03/sf 07/01/10

  15. INDUSTRIAL LAND COMPS AddressSizeUsePriceDate 100 Laurensfield Ct. 8.924 Truck $2.31/sf Garner, NC acres+/1 Maintenance $100,600/acre 7/29/10 2800 Spring Forest 4.80 $3.94/sf Raleigh, NC acres+/- Mini-Storage $171,600/acre 7/28/10 860 E. Garner 4.95 Martin $2.78/sf Garner, NC acres+/- Marietta $121,100/acre 4/1/10 S. New Hope Rd 10.08 Public Service $4.78/sf & Global St, Raleigh, NC acres+/- Gas $206,900/acre 4/1/10 Northeast Food 8.00 Manufacturing $29,000/acre 6/1/10 Clayton, NC acres

  16. CONSTRUCTION COSTSINCREASE • Steel has increased 16% this year • Concrete to increase $5/yard in April • Fuel increase effects asphalt /rubber roof/ PVC Pipe / Transportation • Grading industry is out of business. When the market comes back, a few grading contractors will control the prices charged. • $55/sf to build a 60,000sf concrete building.

  17. LEASE COMPS TYPERATE 24’ – 30’ Clear $3.75 - $4.50/sf 100% HVAC ESFR Lower Ceilings $2.95 - $3.75/sf Older Outside Wake As low as and Durham Counties $1.75/sf

  18. AFFORDABLE OPTIONS LOCATIONTYPERATE/PRICE North Raleigh 148,000sf (30’ clear) $3.75/sf lease Inside the Beltline 56,000sf (rail served) $3.25/sf lease RTP 170,000sf (20’ clear) $3.25/sf lease Knightdale 120,000sf (21’ clear) $2.95/sf lease Clayton 490,000sf (30’ clear) $3.25/sf lease Clayton Industrial Land $29,000 to $65,000/AC Creedmoor 150,000sf (100% HVAC) $1.75/sf lease Butner 42,000sf (Manufacturing) $18.00/sf purchase Butner Industrial Land $19,000/AC

  19. TRIANGLE INDUSTRIAL OVERVIEW Ed Brown, SIOR, CCIM NAI Carolantic Realty March 16, 2011 • LOOK BACK • TODAY • PREDICITIONS

  20. INDUSTRIAL PREDICTIONS 201120122013 Absorption Negative Positive Positive Vacancy Up Down Down Rates Stable Stable Up Spec Construction None None Yes Land Value Down Stable Up Construction Costs Up Up Up Job Growth Good Better Best

  21. SUPPORT TBJ SPACE QUARTERLY • The information TBJ provides helps us all make better decisions. • Most of the information in this overview came from TBJ SPACE.

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