2009 Ccim Naiop Industrial Market Report

CCIM/NAIOP Industrial Market Review

Presented by:

Mark Byers, SIOR

Executive Vice President

EGS Commercial Real Estate

Birmingham Multi-Tenant Market

3rd Quarter Statistics

14,320,000 sf tracked

81% occupied

19% vacant

2,718,000 sf available

539,000 sf of sublease space available

Note: Square Feet (sf)

Birmingham Historical Occupancy

83.2%

86.2%

81.0%

83.1%

88.9%

85.3%

82.0%

85.2%87.2%

90.6%

95.5 %

70

75

80

85

90

95

100

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 3rd Q2009

% Occupancy

3rd Quarter Statistics

Birmingham Industrial Submarkets

Southern3.9 million sf82.7% occupied

Southwestern2.2 million sf63.3% occupied

Eastern1.3 million sf90.0% occupied

Central4.2 million sf84.3% occupied Oxmoor Valley

2.7 million sf83.8% occupied

Map of Southeast

Birmingham Occupancy vs. Other Southeast Markets

89.8%

81.0%

85.7%

88.1%

82.6%

91.1%

74

76

78

80

82

84

86

88

90

92

Atlanta Birmingham Charlotte Jacksonville Memphis Nashville

% Occupancy

3rd Quarter Statistics

Birmingham Vacancy vs. Other U.S. Cities

Market

Overall Vacancy

Rate Market

Overall Vacancy

Rate Market

Overall Vacancy

Rate Market

Overall Vacancy

Rate

Atlanta, GA 10.20% Fredericksburg, VA *** 24.50% Miami, FL 9.10% Richmond, VA *** 10.70%

Austin, TX *** 18.20% Ft. Lauderdale, FL 10% Milwaukee, WI *** 8.80% Roanoke, VA *** 15.10%

Baltimore, MD 12.90%Hampton Roads, VA*** 10.40% Minneapolis, MN 12.50% Rochester, NY *** 11.90%

Bellevue, WA 11.40% Hartford, CT 12.80% Nashville, TN *** 8.90% Salt Lake City, UT *** 7.40%

Bingham, NY *** 13.10% Houston, TX 9.70% Northern, NJ *** 7.40% San Antonio, TX *** 15.60%

Birmingham, AL *** 22.70% Indianapolis, IN *** 10.50% Northern, VA 15.10% San Diego, CA 10.50%

Boston, MA 15.80% Inland Empire, CA 13.50% Oakland, CA 8.90% San Francisco Peninsula, CA 8.40%

Central, NJ *** 10.10% Jacksonville, FL 11.90% Orange County, CA 7.10% Seattle, WA 9%

Charlotte, NC *** 14.30% Kansas City, MO *** 7.10% Orlando, FL 13.60% Silicon Valley, CA 13.90%

Chicago, IL 11.40% Lakeland, FL 6.70%PA I-871/I-78 Distribution Corridor 15.20% St. Louis, MO *** 8.50%

Cleveland, OH *** 7.90% Long Island, NY 10.10% Palm Beach, FL 9.70% St. Petersburg/Clearwater, FL 6.80%

Columbus, OH *** 13.80% Los Angeles, CA 5.10% Philadelphia, PA 8.70% Stockton/Tracy, CA 16%

Contra Costa, CA 15.80% Los Angeles-North, CA 4.40% Phoenix, AZ 15.50% Suburban MD *** 13.60%

Dallas/Ft. Worth, TX 12.40%Los Angeles-South, CA 5.60% Pittsburgh, PA *** 10.10% Syracuse, NY *** 14.90%

Denver, CO 7.30% Louisville, KY *** 9.20% Portland, OR 9% Tampa, FL 8.80%

Detroit, MI *** 18.90% Memphis, TN *** 17.40% Raleigh/Durham, NC *** 12.80% Tucson, AZ *** 10.70%

SOURCE: Cushman & Wakefield Research TOTAL -ALL MARKETS 10.60%

TOTAL - C&W MARKETS 10.30%

A Few Local Successes

Shelby West Corporate Park Owned by

Shelby County

Daniel Payne Industrial Park Owned by

City of Birmingham

Shelby West Corporate Park

Fresenius Medical Care – 123,000 sf build-to-suit currently under construction

Various Land Sales

Shelby West Commerce Center – 154,000 sf speculative building completed 1st quarter

Daniel Payne Industrial Park

Old Dominion Freight Lines 55,000 sf / 100 doors Truck Terminal Under construction

M & A Supply Company 70,000 sf Office/Warehouse 2nd Quarter Delivery

Daniel Payne Industrial Park

Conklin Metal Industries 50,000 sf Office/Warehouse 2nd Quarter Delivery

Flowers Foods 12,000 sf Office/Shipping Depot Under construction

Birmingham Industrial Highlights

Brice Building purchase of 63,000 sf building in the Oxmoor Valley submarket

Vital Records lease of 52,000 sf at Shelby Commerce Park in the Southern submarket

Kaman Industrial Technologies lease of 31,350 sf at Parkwest Corporate Center in the Southwestern submarket

InMark lease of 23,250 sf at Avondale Commerce park in the Central submarket

Pratt Industries lease renewal of 80,500 sf at Perimeter Industrial Park in the Southwestern submarket

Specialty Foundry Products purchase of 58,000 sf building in Southwestern submarket

Alabama Industrial Highlights

Mando America Corporation’s 400,000 sf

expansion in Opelika.

Mercedes’ 225,000 sf expansion in Vance.

Royal Technologies’ construction of 125,000 sf in

Cullman.

Austal USA’s construction of 350,000 sf in Mobile.

Cash Acme’s 175,000 sf expansion in Cullman.

Intermodal Activity

Norfolk Southern $112 million investment 316 acres 8,000 direct and indirect jobs 165,000 containers per year 1440 container parks

planned

CSX $6 million

investment/upgrades 25 acres 300 container parks

The Future of Industrial Construction

700,000 sf 1st generation space on the market today

3.25 million sf of industrial space available

Downward pressure on rates

Limited financing for owner-occupants and for speculative construction

No new speculative buildings

Built-to-Suit will require strong credit and long term leases

Market Forecast

Leasing Activity – At a record low and will not improve until employment, consumer confidence and consumer spending increases.

Construction Activity – Basically has ceased nationwide for speculative industrial product. The same is true for Alabama. Local developers will not begin construction on planned projects until significant absorption of existing product takes place.

Sales – Until credit markets improve and demand increases, industrial building sales will continue to remain flat.

Opportunity – Companies should review their real portfolios because opportunities may exist to reduce real estate related occupancy costs.

CCIM/NAIOP Industrial Market Report

Presented by:

Mark Byers, SIOR

Executive Vice President

EGS Commercial Real Estate