Q42012 cColumb

Vacancy Rates OVeR cOmpletiOns and absORptiOns

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

Q211

Q311

Q411

Q112

Q212

Q312

Q412

(2,000,000)

(1,500,000)

(1,000,000)

(500,000)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Completions Absorptions Total Market Vacancy Rate

IndustrIal trends reportGReateR cOlumbus ReGiOn

www.colliers.com/columbus

Optimism Outweighs Uncertainty industRial maRket OVeRViewthe Columbus industrial market recorded its seventh consecutive quarter of strong positive absorption, as more than 1,445,132 square feet were absorbed this quarter, and 4,938,885 were absorbed for the year. this is a positive sign as 2011 recorded 3,497,841 square feet of positive absorption, nearly 2 million shy of this year’s mark. two notable construction projects were completed during the past quarter, and an additional 924,103 square feet of construction broke ground. restoration Hardware at 100 enterprise parkway completed its 418,655 square foot warehouse expansion, and a 30,000 square foot building at 952-960 north Freeway drive was completed where Mattress Firm will occupy 25,000 square feet of flex space. significant leases were signed by Great lakes at 2160 McGraw road for 185,000 square feet, and rogue Fitness at 3950 Venture Court for 168,850 square feet. Cabot properties purchased a 508,760 square foot warehouse distribution center at 2727 london-Groveport road from trident Capital Group for $13.6 million.

FORecasts and ReFlectiOn• While 2012 will be remembered as the most promising in more than five years since the financial crisis,

much of the market’s success can be attributed to portfolio sale offerings and the trading of assets due to attractive pricing, prime financing and lending opportunities.

• Investment and owner/user sales continue to be a big storyline going into 2013, as fourth quarter showed no signs of a slowdown. Mobis parts america purchased a 377,283 square foot warehouse distribution center at 5900 opus drive for $12.2 million.

• exeter property Group expanded its portfolio at rickenbacker as dCt Industrial trust trimmed its investment holdings. exeter now owns more than 5 million square feet of industrial product in Central ohio after purchasing a 388,264 square foot warehouse distribution center at 4000 Creekside parkway for $12.3 million, and a 432,455 square foot distribution center at 6500 port road for $12.5 million.

Rental Rates

asking rental rates have remained stable over the course of 2012. a slight uptick in warehouse/distribution rates, and modest decreases in general industrial rates can be attributed to falling vacancy rates. there are now just 25 spaces of 20,000 square feet or greater available in r&d/Flex throughout Greater Columbus, causing r&d/Flex rental rates to significantly increase over the past year as leasing remains strong. overall, concessions continue to decrease as larger distribution centers are in short supply.

maRket indicatORs

weiGhted aVeRaGe Rental RatesRates for the major product types

Q4

2012*

Q1

2013**

Vacancy

net absORptiOn

cOnstRuctiOn

Rental Rates — *actual change from previous quarter

**projected change from previous quarter

Q4 2012 | IndustrIal

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

Q308

Q408

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

Q412

General Industrial R&D/Flex Warehouse/Dist.

ReGiOnal industRial ecOnOmicsthe Federal reserve Bank of Cleveland reports at least once a quarter in the Federal reserve’s Beige Book about the economic activity of the fourth district, which includes the Columbus Metropolitan statistical area (Msa). at the beginning of november, the Beige Book reported that economic activity had grown at a modest pace. Manufacturers reported that production output rose slightly during the past six weeks, while new orders weakened. Inventories remained manageable as competition (volume and pricing) from offshore producers has intensified. Capacity utilization is slightly below normal levels.

Many reports on freight volume indicated that the volume is returning to normal trends after a slow second and third quarter. the industries driving transport demand are automotive, construction, and shale gas. lower than expected harvests have negatively impacted revenues, although many companies believe they met their growth objectives for 2012 despite high diesel prices, and maintainence costs. the Beige Book from november 2012 reported that economic activity continued to expand since the september 2012 report, but not as rapidly as anticipated. the outlook by manufacturers was mixed, as shale gas activity continued at a robust pace, and coal production fell between 10 and 50 percent below

prior-year levels. to date, 375 permits have been issued in ohio for drilling horizontal shale gas wells.

nonresidential builders described current business conditions as improving and better when compared to a year ago, and are satisifed with their backlogs going into 2013. projects receiving the strongest inquiries are in the industrial manufacturing and energy, education, and healthcare industries. demand for commercial loans and refinancings continue as investors and businesses take advantage of low interest rates that appear to be disappearing sooner than later.

emplOymentthe Bureau of labor statistics reported manufacturing employment of 61,700 employees in december, which was a decrease of nearly 400 employees from the past quarter. this was an overall decrease of 1,200 employees for the year. Year over year manufacturing is down by 7 percent. trade, transportation and utilities employment grew by 7,000 employees in december since september 2012, a year-to-date increase of 12,000 employees, with a 5 percent employment upturn. Mining, logging and construction decreased by 900 employees in december since september 2012, an overall 2,500 employee increase since January 2012, and is up 3.6 percent year over year.

the Columbus industrial market consists of 10 suburban submarkets and the Central Business district. the total inventory for the region is 211 million square feet of space.

maRket actiVity

sales actiVity

pROpeRty addRess sales date sale pRice size sF GRantOR GRantee pRice / sF type submaRket

2727 london-Groveport road 12/1/2012 $13,600,000 508,760 trident Capital Group Cabot properties $27.00 Warehouse southeast

5900 opus drive 12/3/2012 $12,261,000 377,283 KBs real estate Mobis parts america $32.50 Warehouse southeast

1600 eastgate parkway 11/2/2012 $7,150,000 308,000 Investors Warranty eastgate parkway $23.21 Warehouse east

3300 lockbourne road 11/30/2012 $2,410,000 301,103 Garrison 3300 lockbourne llC B&B lockbourne llC $7.86 Warehouse southeast

5255 sinclair road 11/26/2012 $2,825,000 83,055 CM MedIa InC 5255 sinclair road llC $34.01 Flex/r&d north

5795 Green pointe drive 10/29/2012 $1,800,000 60,800 dennis enterprises Mason Management Group $29.60 Flex/r&d southeast

2499 McGraw road 11/2/2012 $1,100,000 27,810 executive land Holdings llC Celadon realty llC $39.55 Warehouse southeast

3830 lacon road 10/26/2012 $700,000 25,546 Mason Management Group dennis enterprises $27.40 Warehouse West

3882 agler road 11/19/2012 $1,150,000 25,140 I Buck llC Gep properties too llC $45.74 light Industrial east

4080 Business park drive 11/1/2012 $1,400,000 16,000 4080 Investment Co. ltd. star leasing Company $75.48 light Industrial West

Union County

Delaware County

Licking County

North

East

CBD

West

Southwest Southeast

Fairfield County

Pickaway County

Madison County

lease aCtIVItY

pROpeRty addRess lease date lease sF lessee askinG pRice (nnn) type submaRket

2160 McGraw road 12/10/2012 185,000 Great lakes $1.50 Warehouse-distribution southeast

3950 Venture Court 10/17/2012 168,850 rogue Fitness $2.50 Warehouse-distribution West

915 taylor road 11/9/2012 84,000 spinnaker Mgmt/Comfy Couch Co $2.75 Warehouse distribution east

1635 Watkins road 12/10/2012 76,710 Ins electronics $1.95 Warehouse-distribution southeast

320 outerbelt street 11/2/2012 70,000 rightway solutions/dns distribution $2.50 Warehouse distribution east

2120 Creekside parkway 11/1/2012 64,992 exel $3.25 Warehouse-distribution southeast

2250 International street 11/26/2012 51,840 arlington Contact lens service $3.00 Warehouse-distribution West

p. 2 | cOllieRs inteRnatiOnal

research & forecast report | Q4 2012 | industrial | Greater Columbus reGion

cOnstRuctiOn

Exxcel Project Management partnership started construction on a 478,053 square foot distribution center at the CenterPoint Business Park north of Rickenbacker International Airport in Obetz. This is the first major speculative industrial space in Central Ohio in years, due largely to the changing demand for bulk warehouse/distribution space, which recorded 1.1 million square feet of net absorption last quarter.

update market comparisons

industRial maRket

net absorption construction asking Rental Rates

submaRket total sF Vacant sF Vacancy % current Quarter year-to-date current completions wh/dist R&d/Flex

CBd 5,335,716 410,270 7.7% 68,482 (10,167) - $6.63

east 20,442,133 1,764,513 8.6% 1,467,111 1,738,292 - $2.60 $5.29

FaIrFIeld 6,114,387 64,500 1.1% (35,500) 234,920 - $4.00

lICKInG 19,112,312 1,346,046 7.0% - 109,000 50,000 - $2.76

MadIson 8,576,748 - 0.0% - - 450,000 418,655

nortH 16,814,944 1,272,891 7.6% 85,376 (149,936) 30,000 $4.13 $4.98

nortH delaWare 8,796,109 562,566 6.4% (26,621) 45,028 - $3.21 $7.00

pICKaWaY 3,602,146 84,250 2.3% - (22,750) -

soutHeast 64,139,813 7,228,149 11.3% (66,751) 2,577,012 824,103 - $2.57 $3.53

soutHWest 17,512,083 1,015,708 5.8% (12,743) 333,007 - $2.98 $3.40

unIon 6,299,770 342,116 5.4% (153,536) (65,351) - $3.11 $6.44

West 34,873,110 2,426,640 7.0% 129,314 127,330 - $2.34 $3.96

totals 211,821,516 16,517,649 7.8% 1,455,132 4,938,885 924,103 448,655 $2.62 $4.82


pROpeRty type total sF Vacant sF Vacancy % current Quarter year-to-date current completions by product typer&d/Flex 20,188,473 2,533,132 12.5% 233,210 498,845 45,800 30,000 $4.82

General IndustrIal 70,015,457 3,374,942 4.8% 909,725 1,364,277 70,000 - $2.82

WareHouse/

dIstrIButIon

121,617,586

10,609,575 8.7% 312,197 3,075,763 755,250 418,655 $2.62

totals 211,821,516 16,517,649 7.8% 1,455,132 4,938,885 924,103 448,655 $2.99

QuaRteRly cOmpaRisOn and tOtals


QuaRteR, yeaR total sF Vacant sF Vacancy % current Quarter year-to-date current completions ($)Q3, 2012 211,027,622 19,227,318 9.1 757,254 3,461,253 1,259,655 - $2.87

Q2, 2012 213,192,579 21,359,885 10 1,430,866 2,703,999 425,000 900,000 $2.95

Q1, 2012 212,418,016 22,790,751 10.7 1,273,133 1,273,133 898,000 - $3.04


cOllieRs inteRnatiOnal | p. 3

centRal business distRictthe Central Business district (CBd) recorded 68,482 square feet of positive absorption in the fourth quarter, largely attributed to a 54,531 square foot owner/user sale at 433 state street, and a 13,951 square foot flex space sale at 892-896 scott street. absorption in the CBd overall for 2012 has improved, as the area is seeing its lowest vacancy rate (7.7 percent) in years. absorption as a whole has been strong for seven consecutive quarters in the CBd, with just six spaces of 10,000 square feet vacant, two of which have more than 100,000 square feet available.

eastthe submarkets comprising eastern Columbus are east and licking County. the licking submarket absorption has remained flat, and vacancy is relatively unchanged from the previous quarter. southgate Corp. continues construction on its 50,000 square foot bulk warehouse at 94 Integrity in licking County, with the abililty to expand to 150,000 square feet. In the east, vacancy rates have lowered dramatically to around 9 percent, after lingering in the 20 percent range for over two years. two major sales are responsible for the shift of momentum in the east. trident Capital Group purchased a 1,240,991 square foot warehouse distribution center at 6200 e. Broad street for $2.3 million. the building is scheduled to be demolished for eventual redevelopment. niagara Bottling purchased the former 308,000 square foot amerigraph printing plant in Gahanna for $7.2 million. spinnaker Management and Comfy Couch leased 84,000 square feet of space at 915 taylor road. rightway solutions and dns distribution leased a total of 70,000 square feet at 320 outerbelt street.

nORththe submarkets comprising northern Columbus are north and north delaware. the north submarket recorded 85,376 square feet of positive absorption as Hoshizaki leased 14,550 square feet of flex space at 7461 Worthington Galena road. the north delaware submarket recorded 26,621 square feet of negative absorption after 113,265 square feet was vacated at 1020 pittsburgh drive. Construction has completed on the 30,000 square foot Mattress Firm building at 952-960 n. Freeway drive.

sOutheastthe southeast submarket stumbled in the fourth quarter after driving the market for most of 2012. pepsi vacated 705,000 square feet at 3800 Groveport road causing the vacancy rate to to slip to 11.3 percent. Great lakes, 185,000 square foot lease at 2160 McGraw road is the highlight of the quarter. While 66,751 square feet of negative absorption occured in the fourth quarter, the prior three quarters were strong enough to keep year to date absorption positive at 2,577,012 square feet and be

remembered as the best performing submarket of 2012. Construction is improving as exxcel began construction on a 478,053 square foot speculative distribution center. Construction continues on the 305,250 square foot Fedex smartpost distribution facility.

sOuthwestthe southwest submarket experienced relatively insignificant negative absorption of 12,743 sqaure feet. Minor leases of 10,000 and 40,000 square feet occurred at 3940 Gantz road, and 27 Jenkins road respectively. standard register downsized by 63,041 square feet of space at 3515 urbancrest Industrial drive.

westthe submarkets on the west side of Franklin County are West, Madison and union. the West submarket recorded positive absorption of 129,314 square feet, an additional 100,000 square feet from the previous quarter, with a astonishing 150 basis point drop in vacancy to 7 percent. a 168,500 square foot lease signed by rogue Fitness at 3950 Venture Court, along with 155,688 square feet of other significant signings were offset by Jacobson’s Warehouse’s 173,903 square foot move out at 2642 Fisher road. Madison showed no leasing activity but construction continues on expanding the target Corp. distribution center by 425,000 square feet. the 418,655 square foot restoration Hardware expansion at 1000 enterprise parkway has been completed.

maRket intelMarket activity Volume is the sum of the absolute value of each absorption change in the market. It tells us a little more about what exactly happened to the market behind the absorption number. the Market activity Volume was 4,725,008 square feet. this is well above the average (3,463,631 square feet) for fourth quarters in the past three years. there are 56 buildings with vacant contiguous space equal to or greater than 100,000 square feet left in the Columbus market. 10 were built since 2000 and 9 of those are warehouse/distribution.

tenants in the maRketthe types of tenant seen most frequently are 40,000-70,000 square foot light warehouse and Flex/r&d users. Bulk warehouse and distribution users seeking more than 200,000 square feet are beginning to subside, but will continue to drive the market. auto suppliers, technology companies (e-commerce distributors, internet based retailers and third party logistic firms) are also active in the region. the largest leases of 2012 were Jacobson Warehouse leasing 455,667 square feet at 2450 spiegel drive; Innotrac leasing 434,120 square feet at 6440 port road; and restoration Hardware leasing 418,655 square feet at 100 enterprise parkway.

leslie Hobbsdirector of Marketing | ohiotwo Miranova placesuite # 900Columbus, ohio 43215tel +1 614 410 5640

Jonathan schuenresearch analysttwo Miranova placesuite # 900Columbus, ohio 43215tel +1 614 437 4495

522 offices in 62 countries on 6 continentsunited states: 147Canada: 31latin america: 19asia pacific: 201eMea: 118

• $1.8 billion in annual revenue

• 1.25 billion square feet under management

• over 12,500 professionals

this document/email has been prepared by Colliers International for advertising purposes. Colliers International statistics and data are audited annually and may result in revisions to previously reported quarterly and final year-end figures. sources include Columbus dispatch, Business First, xceligent, Costar, Chain store age, Wall street Journal, Bureau of labor statistics, Bureau of economic analysis, Gallup and the Cleveland Federal reserve.

www.colliers.com/columbus

accelerating success.

united states:

Greater Columbus regionrichard B. schuen sIor CCIMCeo | principal | Columbustwo Miranova placesuite # 900Columbus, ohio 43215tel +1 614 410 5612
