North American Research Report INDUSTRIAL MARKET OUTLOOK Q2 2015 Key Takeaways > The North American industrial market continued its torrid expansion in Q2 2015 as vacancies declined by 20 basis points (bps) to 6.4%. In the U.S., the vacancy rate fell for the 22nd straight quarter, down 20 bps to 6.8%. In Canada, the vacancy rate fell 7 basis points to 3.7%. > North American net absorption totaled 74.3 million SF (MSF), broken out into 72.4 MSF for the U.S. and 1.9 MSF for Canada. This is the highest level of industrial demand seen post-recession and is heavily concentrated in bulk distribution space in a handful of markets. > Strong industrial space demand and tightening vacancies are pushing up asking rents in most markets. The average asking rent for warehouse buildings in the U.S. rose 1.6% over the previous quarter to end at $5.23 PSF. However, in Canada, rents at C$7.99 PSF, are down 1.4% from the prior quarter. > Some markets are seeing outsized increases in asking rents. Asking rents for warehouse space were up significantly in Walnut Creek (+29.6% year-over-year through 2Q), Birmingham (22.4%) and Oakland (21.7%). Asking rents for bulk space were up in Denver (26.5%), Greenville (20.7%) and San Francisco Peninsula (20.5%). And flex/service asking rents were up strongly in San Francisco Peninsula (28.4%), Miami (23.1%) and Stockton (22.2%). > The results of Colliers’ North American Q2 survey remained optimistic. Of the 70 U.S. markets surveyed by Colliers, 57 forecast positive industrial demand for the next three months. Of the 11 Canadian markets surveyed by Colliers, 6 forecast positive industrial demand for the next three months. > Investors remain hungry for yield worldwide, and the safety that U.S. denominated industrial assets provide is leading to a continued surge in mega-deal activity. Last quarter saw ProLogis’ purchase of KTR and GIC’s purchase of the Indcor portfolio. Currently in the works is the acquisition of Industrial Income Trust by GIC, which would make GIC the second-largest operator of U.S. warehouse properties. In addition, the Abu Dhabi Investment Authority is teaming up with Canadian PSP investments to purchase the 55 MSF Exeter Property portfolio. Industrial Sector Surges As Completions, Absorption, Occupancy Hit 7-Year High Pete Culliney Director of Research | Global Thomas Galvin Regional Research Analyst | Research Services Summary Statistics, Q2 2015 North America Industrial Market U.S. CANADA NORTH AMERICA Vacancy Rate 6.8% 3.7% 6.4% Change from Q1 2015 (Basis Points) -20 -7 -19 Absorption (MSF) 72.4 1.9 74.3 New Supply (MSF) 50.3 3.9 54.3 Under Construction (MSF) 156.5 21.1 177.6 ASKING RENTS (USD/CAD) PER SQUARE FOOT PER YEAR Average Warehouse/ Distribution Center $5.23 $7.99 Change from Q1 2015 1.6% -1.4% Market Indicators Relative to prior period U.S. Q2 2015 U.S. Q3 2015* CANADA Q2 2015 CANADA Q3 2015* VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE** * Projected, relative to prior period ** Warehouse rents
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North American Research Report
INDUSTRIAL MARKET OUTLOOKQ2 2015
Key Takeaways > The North American industrial market continued its torrid expansion in Q2 2015 as vacancies declined by 20 basis points (bps) to 6.4%. In the U.S., the vacancy rate fell for the 22nd straight quarter, down 20 bps to 6.8%. In Canada, the vacancy rate fell 7 basis points to 3.7%.
> North American net absorption totaled 74.3 million SF (MSF), broken out into 72.4 MSF for the U.S. and 1.9 MSF for Canada. This is the highest level of industrial demand seen post-recession and is heavily concentrated in bulk distribution space in a handful of markets.
> Strong industrial space demand and tightening vacancies are pushing up asking rents in most markets. The average asking rent for warehouse buildings in the U.S. rose 1.6% over the previous quarter to end at $5.23 PSF. However, in Canada, rents at C$7.99 PSF, are down 1.4% from the prior quarter.
> Some markets are seeing outsized increases in asking rents. Asking rents for warehouse space were up significantly in Walnut Creek (+29.6% year-over-year through 2Q), Birmingham (22.4%) and Oakland (21.7%). Asking rents for bulk space were up in Denver (26.5%), Greenville (20.7%) and San Francisco Peninsula (20.5%). And flex/service asking rents were up strongly in San Francisco Peninsula (28.4%), Miami (23.1%) and Stockton (22.2%).
> The results of Colliers’ North American Q2 survey remained optimistic. Of the 70 U.S. markets surveyed by Colliers, 57 forecast positive industrial demand for the next three months. Of the 11 Canadian markets surveyed by Colliers, 6 forecast positive industrial demand for the next three months.
> Investors remain hungry for yield worldwide, and the safety that U.S. denominated industrial assets provide is leading to a continued surge in mega-deal activity. Last quarter saw ProLogis’ purchase of KTR and GIC’s purchase of the Indcor portfolio. Currently in the works is the acquisition of Industrial Income Trust by GIC, which would make GIC the second-largest operator of U.S. warehouse properties. In addition, the Abu Dhabi Investment Authority is teaming up with Canadian PSP investments to purchase the 55 MSF Exeter Property portfolio.
Industrial Sector Surges As Completions, Absorption, Occupancy Hit 7-Year HighPete Culliney Director of Research | Global Thomas Galvin Regional Research Analyst | Research Services
Summary Statistics, Q2 2015 North America Industrial Market
U.S. CANADANORTH
AMERICA
Vacancy Rate 6.8% 3.7% 6.4%
Change from Q1 2015 (Basis Points)
-20 -7 -19
Absorption (MSF)
72.4 1.9 74.3
New Supply (MSF)
50.3 3.9 54.3
Under Construction (MSF)
156.5 21.1 177.6
ASKING RENTS (USD/CAD) PER SQUARE FOOT PER YEAR
Average Warehouse/Distribution Center
$5.23 $7.99
Change from Q1 2015 1.6% -1.4%
Market IndicatorsRelative to prior period
U.S. Q2 2015
U.S. Q3 2015*
CANADA Q2 2015
CANADA Q3 2015*
VACANCY
NET ABSORPTION
CONSTRUCTION
RENTAL RATE**
* Projected, relative to prior period** Warehouse rents
W E S T Absorption Per Market (SF)Q1 2015 to Q2 2015
8,000,000
4,050,000
810,000
-810,000
-4,050,000
-8,100,000
4.5 billion
2.25 billion
450 million
Occupied SF
Vacant SF
SF By RegionU.S. Industrial Economic Indicators
GDP
Q2 2015 3.7% (second estimate)
Q1 2015 0.6%, down from 2.1% in Q4 2014
ISM
Jul-15 PMI® 52.7, down 0.8 pctg. pts. from June-15
RAIL TIME INDICATORS: AAR.ORG
Total Railcar Traffic - 1.8% YOY since July-14
Intermodal Traffic + 3.5% YOY since July 14
C A N A D A
N O R T H E A S TM I D W E S T
S O U T H
W E S T Absorption Per Market (SF)Q1 2015 to Q2 2015
8,000,000
4,050,000
810,000
-810,000
-4,050,000
-8,100,000
4.5 billion
2.25 billion
450 million
Occupied SF
Vacant SF
SF By Region
C A N A D A
N O R T H E A S TM I D W E S T
S O U T H
W E S T Absorption Per Market (SF)Q1 2015 to Q2 2015
8,000,000
4,050,000
810,000
-810,000
-4,050,000
-8,100,000
4.5 billion
2.25 billion
450 million
Occupied SF
Vacant SF
SF By Region
2 North American Research Report | Q2 2015 | Industrial Market Outlook | Colliers International
The North American industrial market is at a post-recession high, recording the lowest levels of vacancy coupled with record completions and record net absorption. In the U.S., this is leading to upward pressure on asking warehouse rental rates, which have increased 1.6% from the previous quarter and 5.2% year over year. Still, some caution is warranted as this market strength is highly concentrated. Moreover, 40% of the net absorption seen in 2015 and nearly half of the construction activity are taking place in only a handful of markets: Southern California, Houston, Dallas-Ft. Worth, Chicago and Atlanta. The economic drivers of these markets - international trade and supply chain modernization - will have an outsized effect on the North American aggregate numbers. Caution is also warranted as recent financial market volatility point to rising global economic risks that could weigh on future economic growth in North America and ultimately slow industrial space demand. Nonetheless, recent performance in the industrial sector has been among the strongest this century and explains growing investor interest in good industrial product.
Industrial Economic Indicators For the United States, second quarter GDP numbers increased at an annual rate of 3.7%. Gains were made in personal consumption, housing construction and exports. For the United States the manufacturing sector continues to expand, with the Purchasing Managers Index (PMI) recording 52.7 in July, the 31st consecutive month of growth.
For Canada, the latest results indicate a decline in GDP and the Bank of Canada has lowered interest rates in an effort to bolster lending. The RBC Canadian Manufacturing PMI registered 50.8 in July, a marginal upturn in the manufacturing sector.
Job growth has been positive in the manufacturing sector, which has added 522,000 jobs (1.4%) since the second quarter of 2014. U.S. manufacturing has become increasingly attractive due to cheaper domestic energy and rising labor costs overseas. For many
companies the decision to outsource has added complexity, when the shrinking margin on foreign labor, product quality, intellectual property rights and a long distance supply chain are factored in. Overall, however, manufacturing employment is still down from before the recession, but the recent job growth has been a welcome turnaround for the economy – and a driver for U.S. industrial demand.
One negative indicator is the 1.0% year-over-year decrease in total railcar traffic according to the American Association of Railroads, although intermodal traffic has increased by 2.5% year-over-year. A major reason for the decline in railroad traffic has been decreased demand for petroleum, metallic ores and coal.
Several complex issues are at play that impact the industrial landscape in the near and longer term. In the short term, the Chinese currency was devalued by more than 4% in late August, partly in response to lagging exports. This was the sharpest drop in the Yuan since 1994 and will likely boost imports from China in the short term while also limiting exports to China. Industries likely to suffer as a result include agricultural products, electronic equipment, machines and aircraft – which can ultimately hit warehouse demand, particularly near port cities. The slowdown in China and elsewhere in emerging markets is another growing risk to U.S. expansion and continued strength in the industrial property sector.
For the longer term, the prolonged collapse in the commodity market is likely to persist for some time and almost certainly into 2016, meaning pain for those areas whose economies depend on natural resources such as oil, coal or iron. This is an increased chance of recession for Canada and Australia among others, whose economies
Sources: BEA, ISM, AAR
North American Industrial Vacancy, Inventory & Absorption Q2 2015 | NA
How would you characterize current industrial rents in your market?
% of reporting marketsSource: Colliers International
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.7 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, AB
Winnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QC
Saskatoon, SK
Edmonton, AB
Waterloo Region, ON
Vancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
3 North American Research Report | Q2 2015 | Industrial Market Outlook | Colliers International
depend heavily on resource extraction. Those areas in the United States that depend heavily on oil production will also be impacted negatively.
Vacancy
Driven by robust absorption in the top U.S. markets, the North American vacancy rate fell by 20 bps to 6.4% in Q2. The decline was broad-based, as the U.S. vacancy rate dropped 20 bps to 6.8%, while the vacancy rate in Canada dropped 7 bps to 3.7%.
Vacancy rates declined in each U.S. region, led by the South, which dropped 24 bps to 7.6%. There is a wide disparity in rates among the regions as of the first quarter. The West remained the lowest at 5.0%, trailed by the Midwest (6.6%) and the South (7.6%) while vacancies remained relatively high in the Northeast (8.6%). Western markets ranked among the lowest vacancy rates include Los Angeles (1.8%), Honolulu (2.0%), San Francisco Peninsula (2.7%) and Orange County (3.1%).
Savannah was the best performer in the second quarter with the vacancy rate dropping by 150 bps to 3.7%. Other markets with sharp drops in vacancy rates were Dayton (-130 bps to 9.1%) and Austin (-120 bps to 7.1%). On the other end of the spectrum, markets with the largest increases were Calgary (+150 bps to 5.8%), Bakersfield (+140 bps to 4.8%) and Stockton (+110 bps to 8.4%). Calgary is the epicenter of Canadian oil and gas extraction, while Bakersfield and Stockton are heavily reliant on agricultural products hurt by a prolonged drought in California.
Manufacturing at a Glance - July 2015
INDEXSERIES INDEX
(JULY 2015)
SERIES INDEX
(JUNE 2015)
PERCENTAGE-POINT
CHANGEDIRECTION RATE OF
CHANGETREND*
(MONTHS)
PMI® 52.7 53.5 -0.8 Growing Same 31
New Orders 56.5 56.0 0.5 Growing Faster 32
Production 56.0 54.0 2.0 Growing Faster 35
Employment 52.7 55.5 -2.8 Growing Slower 3
Supplier Deliveries 48.9 48.8 0.1 Faster Slower 2
Inventories 49.5 53.0 -3.5 Contracting From Growing 1
Customer Inventories 44.0 48.5 -4.5 Too Low Faster 8
Prices 44.0 49.5 -5.5 Decreasing Faster 9
Backlog of Orders 42.5 47.0 -4.5 Contracting Faster 2
Exports 48.0 49.5 -1.5 Contracting Faster 2
Imports .... 53.5 -1.5 Growing Slower 30
OVERALL ECONOMY Growing Slower 74
Manufacturing Sector Growing Slower 31
U.S. Industrial Market Q2 2013 to Q2 2015
Note: Latest data as of Q2 2015 Source: Colliers International
*Number of months moving in current directionSource: ISM
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
Absorption, Under Construction (SF)Select U.S. Markets | Q2 2015
Absorption, Under Construction (SF)Select Canada Markets | Q2 2015
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, AB
Winnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QC
Saskatoon, SK
Edmonton, AB
Waterloo Region, ON
Vancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
4 North American Research Report | Q2 2015 | Industrial Market Outlook | Colliers International
Absorption
Net absorption was strong in Q2 at 74.3 MSF, broken out into 72.4 MSF in the U.S. but only 1.9 MSF in Canada. We expect positive absorption to continue this year in the vast majority of markets. In fact, of the 82 markets in North America, we forecast negative absorption in only two: Calgary and Boston.
U.S. Q2 absorption was concentrated in a handful of markets such as the Los Angeles – Inland Empire market, which saw absorption of 5.3 MSF, followed by Houston (3.8 MSF), Atlanta (3.7 MSF), Northern New Jersey (3.5 MSF) Los Angeles (3.5 MSF) and Dallas-Ft. Worth (3.0 MSF). Top Canadian markets for absorption were Vancouver (1.8 MSF) and Toronto (1.7 MSF).
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2Va
canc
y %
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2Va
canc
y %
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, ABWinnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QCSaskatoon, SKEdmonton, AB
Waterloo Region, ONVancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
0.0 5.0 10.0 15.0 20.0 25.0
New Jersey - Northern
Savannah, GA
New Jersey - CentralIndianapolis, IN
Houston, TX
Los Angeles, CA
Atlanta, GA
Dallas-Ft. Worth, TX
Los Angeles - Inland Empire, CA
Chicago, IL
Millions
Excluding renewals, of the leases signed this quarter, did most tenants expand, hold steady or contract?
Provide a three month forecast for rents (relative to current quarter):
Source: Colliers International
Provide a three month forecast for vacancy levels (relative to current quarter):
% of reporting marketsSource: Colliers International
5 North American Research Report | Q2 2015 | Industrial Market Outlook | Colliers International
Construction Activity
Rising industrial demand is pushing new supply to pre-recession totals. Some 54 MSF of space came online in North America in Q2, including 50.3 MSF in the U.S. and 3.9 MSF in Canada. The quarterly volume of construction activity is at the highest level since Q4 2007, with no letup in sight. 177.6 MSF is under construction in North America, including 156.5 MSF in the U.S. and 21.1 MSF in Canada. Markets with the most new supply in the second quarter were Los Angeles – Inland Empire (6.5 MSF), Chicago (5.6 MSF) and Atlanta (3.6 MSF). In each of those markets virtually all of the new supply was in modern distribution centers which have the higher ceilings, larger truck courts, ESFR sprinklers and other improvements that are needed by logistics and e-retailer tenants.
A large and growing portion of the new supply is speculative – 56% in the United States and over 70% in Canada – as developers and lenders become more comfortable with taking on leasing risk for new product. So far that confidence has been justified as supply and demand have been in balance with enough tenant demand to fill the projected development pipeline.
Transaction Activity
Investor demand for U.S. industrial real estate remains high and will likely increase. For the first half of 2015, investment volume is up 70% from the previous year on investment volumes of $37 billion. Of this, roughly 14.3 billion (38%) have been from foreign direct investment inflows, primarily focused in Chicago ($1.1 billion), New Jersey ($1 billion) and Los Angeles ($1 billion).
Investors are drawn to the industrial sector’s relatively low volatility compared to office or retail investments. Institutions looking in this sector are willing to pay a premium for portfolios in order to allocate large chunks of capital.
In today’s low yield environment, the industrial sector continues to post the highest average cap rates for any commercial property type, averaging nationwide at 6.9%. This is down 10 bps from the 7.0% reported in the previous quarter and down 140 bps since 2010.
Investors will look keenly to what the Federal Reserve Bank will or will not do in the fall and the resulting impact on cap rates. Investors are likely to pull money out of emerging markets in anticipation of higher returns on U.S. backed assets; paradoxically we may see investment rise if rates increase.
Industrial Transaction Volume Q2 2015 - NA
Note: Latest data as of Q2 2015; all data are 12-month trailingSources: Real Capital Analytics, Colliers International
0%
20%
40%
60%
80%
100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter, did most tenants Expand, Hold Steady or Contract?
Contract Holding Steady Expand N/A
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
20.0% 25.0%
2.9% 6.1%
46.2%
40.0%
45.8%43.5%
58.3%
44.3%46.3%
46.2%40.0%
41.7% 52.2%
16.7%
45.7%41.5%
7.7% 12.5% 4.3% 7.1% 6.1%
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
8.6%
8.3%
8.5%
25.0%
3.7%
1.4%17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0% 20% 40% 60% 80% 100%
U.S.
Canada
N.A.
8.6%
8.3%
8.5%
25.0%
1.2%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
8.6%
8.3%
8.5%
25.0%
17.1%
33.3%
19.5%
67.1%
25.0%
61.0%
5.7%
8.3%
6.1%
0%
20%
40%
60%
80%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for vacancy levels (relative to current quarter):
0%
20%
40%
60%
80%
100%
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/AUpSameDown N/A
Northea
stSout
h
Midwest West U.S.
Canada N.A.
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%
30.5%
25.0%12.5% 7.7% 4.3% 7.1% 6.1%
70.0%
66.7%
38.5%
82.6%67.1%
16.7%
59.8%
30.0%20.8%
53.8%
13.0%25.7%
58.3%
30.5%
25.0%20.8%
53.8%
13.0%25.7%
58.3%
3.7%12.5% 3.7%7.7% 4.3% 7.1% 6.1%
70.0%
80.0%62.5%
38.5%
56.5% 58.6%53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.2%
80.0%62.5%
38.5%
56.5% 58.6%
25.0%
53.7%
25.0%53.8%
43.5% 32.9%
50.0%
35.4%
20.0% 8.3%7.7% 7.1%
25.0%
9.8%4.2% 1.4% 1.2%1.4%
25.0%
7.7 7.5 7.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.010.020.030.040.050.060.070.080.0
Q2 2013 Q3 Q4Q1 2
014 Q2 Q3 Q4Q1 2
015 Q2
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
8.6 8.3 8.1 7.9 7.7 7.5 7.2
U.S. INDUSTRIAL MARKET Q2 2013 - Q2 2015
8.1 7.0 7.0 6.8 6.8
-2.0 0.0 2.0 4.0 6.0 8.0 10.0Millions
Currently U/C Q2-15 Absorption
Calgary, AB
Winnipeg, MB
Regina, SK
Ottawa, ON
Victoria, BC
Montréal, QC
Saskatoon, SK
Edmonton, AB
Waterloo Region, ON
Vancouver, BC
Toronto, ON
Currently U/C Q2-15 Absorption
ABSORPTION, UNDER CONSTRUCTION (SF) | SELECT MARKETS | Q2 2015
Sources: Real Capital Analytics, Colliers International
Top 5 MSAs in Transaction Volume Q2 2015
1. Los Angeles, CA $3.0 bil.
2. Chicago, IL $1.9 bil.
3. Dallas, TX $1.6 bil..
4. Northern New Jersey $1.5 bil..
5. Los Angeles - Inland Empire, CA $1.4 bil.
14.3% 8.3% 6.2% 6.5%
38.1%43.5%
75.0%
38.5% 44.2%44.4%
11.1%11.1%
19.0%52.5%
16.7%
41.5% 37.7%28.6%
13.8% 11.7%100%
Midwest
Northea
stSout
hWest
Canada U.S.
N.A.
Excluding renewals, of the leases signed this quarter,didmost tenants Expand, Hold Steady or Contract?
44.4%
16.7%
58.3%
25.0%
Holding SteadyContract Expand N/A
13.8% 18.5% 56.9% 6.2%
16.7%
11.7%
8.3%
1.3%
3.9%
41.7%
22.1%
33.3%
53.2% 7.8%
0% 20% 40% 60% 80% 100%
U.S.
Canada
NorthAmerica
How would you characterize current industrial rents in your market?
N/A
DecliningBottoming
No Clear Direction
Increasing
Peaking
44.4% 42.9%58.3% 62.5% 53.8%
8.3%46.8%
55.6%
28.6%25.0% 30.4% 32.3%
75.0%
39.0%
100%
Northea
stSout
h
Midwest West U.S.
Canada N.A.
Provide a three month forecast for rents (relative to current quarter):
Up Same Down N/A
66.7%57.1% 50.0%
65.2% 60.0%
25.0%
11.1% 14.3%41.7% 30.4% 24.6%
41.7%
22.2% 28.6%8.3% 4.3% 15.4%
33.3%
100%
Northeas
tSout
hMidw
est West U.S.Cana
da
Provide a three month forecast for vacancy levels (relative to current quarter): Down Same Up
14.3% 8.3% 6.2% 6.5%
38.1%43.5%
75.0%
38.5% 44.2%44.4%
16.7%
41.5% 37.7%28.6%
4.2%4.2% 13.8% 11.7%16.7%
58.3%
25.0%
44.4%19.0%
13.8%
11.7%
8.3%
4.6%
18.5%
41.7%
22.1%
56.9%
33.3%
53.2%
6.2%
16.7%
7.8%
44.4% 42.9%58.3% 65.2% 53.8%
8.3%46.8%
55.6%
28.6%
28.6%28.6%25.0%16.7%16.7%
30.4%4.3%4.3%
32.3%
13.8%13.8%
75.0%
16.7% 2.6%11.7%2.6%11.7%16.7%
39.0%
66.7%57.1% 50.0%
65.2% 60.0%
25.0%
11.1% 14.3%41.7% 30.4% 24.6%
41.7%
22.2% 28.6%8.3% 4.3% 15.4%
33.3%
9.1 8.8 8.7 8.3 8.1 7.9 7.7 7.4 7.1
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.0
20.0
40.0
60.0
80.0
Q4 Q1 2013
Q2 Q3 Q4 Q1 2014
Q2 Q3 Q4
Vaca
ncy
%
Absorption MSF Completions MSF Vacancy %
9.1 8.8 8.7 8.3 8.1 7.9 7.7 7.4 7.1
Winnipeg, MBSaskatoon, SKHalifax, NS**
Victoria, BCToronto, ONRegina, SK
Ottawa, ON***Edmonton, AB
Waterloo Region, ONVancouver, BC
Montréal, QCCalgary, AB
-1.0 0.0 2.0 4.01.0 3.0
8.2
5.00.0 5.0 10.0 15.0 20.0Millions
Currently U/C Q4-14 Absorp Currently U/C Q4-14 Absorp
Millions
Savannah, GADallas-Ft. Worth, TX
Houston, TXLos Angeles, CAIndianapolis, IN
Los AngelesInland Empire, CA
Chicago, ILAtlanta, GA
-100%
-50%
0%
50%
100%
150%
200%
$0 $10 $20 $30 $40 $50 $60 $70 $80
2007 2008 2009 2010 2011 2012 2013 2014
Bil.
12-Month Trailing Volume (left-axis)
Year-Over-Year % Change (right-axis)
52.5%
Source: Colliers InternationalSource: Colliers International
Industrial Real Estate Indicators U.S.
GDP: 3.7% in Q2
Inventory 15.0 BSF
Vacancy 6.8% Nationwide (down 20 bps)
Net Absorption 72.4 MSF in Q2
New Supply 50.3 MSF in Q2, up 1.2% over Q1
New Supply to Inventory 1.3% annualizedNote: Up to 2% is considered healthy
Net Absorption to New Supply Ratio 1.4:1 Q2 2015 vs. 1.2:1 Q1 2015
• Top 10 Markets account for 57.2% of 72.4 MSF net absorption in Q2.
Top 5 MSAs Q2 Net Absorption
1. Chicago, IL 8.1 MSF
2. Los Angeles - Inland Empire, CA 6.9 MSF
3. Dallas-Ft. Worth, TX 6.1 MSF
4. Atlanta, GA 4.6 MSF
5. Los Angeles, CA 3.1 MSF
6 North American Research Report | Q2 2015 | Industrial Market Outlook | Colliers International
Conclusion and Outlook The industrial sector is posting record absorption and rental rate increases with mixed macro-economic signals. Domestically, the U.S. is in fine shape, though risks from abroad are rising, particularly in China.
The rising U.S. dollar is making exports less competitive and the prolonged commodity bust for oil, gas and other minerals is ongoing. This means that markets reliant on oil and gas extraction or agricultural products are likely to remain subdued. By contrast, markets along the path of goods movement and growing population centers with robust housing demand are seeing record development and industrial demand.
North American Industrial Overview | Q2 2015NORTH AMERICA CANADA UNITED STATES WEST MIDWEST SOUTH NORTHEAST
GlossaryBulk Space – Warehouse space 100,000 square feet or more with minimum ceiling heights of 24 feet. All loading is dock-height.
Flex Space – Single-story build-ings having 10 to 18-foot ceilings with both floor-height and dock-height loading. Includes wide variation in office space utilization, ranging from retail and personal service, to distribution, light industrial and occasional heavy industrial use.
Service Space – Single-story (or mezzanine) with 10 to 16-foot ceilings with frontage treatment on one side and dock-height loading or grade-level roll-up doors on the other. Less than 15 percent office space.
Tech/R&D – One and two-story, 10 to 15-foot ceiling heights with up to 50% office/dry lab space (remainder in wet lab, workshop, storage and other support), with dock-height and floor-height loading.
Warehouse – 50,000 square feet or more with up to 15 percent office space, the balance being general warehouse space with 18 to 30-foot ceiling heights. All loading is dock-height.