Xceligent - 3Q14 Industrial Market Trends by STLCR

St Louis, Missouri 3rd Quarter 2014

INDUSTRIAL Market Trends

Table of Contents/Methodology of Tracked Set

St Louis Market Maps

Q2 2014 Overview

Overview by Submarket/ Property Type

5-7

Vacancy & Lease Rates

8-9

Biggest Absorption Changes

Available Space

Notable Transactions

Vacancy & Absorption

Xceligent St Louis Contact

The St Louis tracked set consists of an inventory of buildings considered to be competitive within the brokerage community. All buildings within the competitive tracked set have been reviewed and verified by members of the Advisory Boards for each market area. Inventory

The total square feet of all existing single and multi tenant industrial properties greater than 10,000 SF.

Total Available SF

All of the available leasable space within a building, whether it is occupied or vacant, for direct lease or sublease space. Space can be available but not vacant, for example, if the landlord, or his agent, is marketing space that will be coming available at a future date because a tenant is planning to move.

Total Vacant SF

The total of all of the vacant square footage within a building, including both direct and sublease space.

Direct Vacant SF

The total of the vacant square footage in a building that is being marketed by an agent representing the landlord.

Sublease SF

Space that is offered for lease by a current tenant, or his agent, within a property. Whether the tenant is paying rent or not, the space is considered vacant only if it is unoccupied.

Net Absorption

The net change in physically occupied space from quarter to quarter, expressed in square feet.

St Louis Industrial Markets

Q3 2014 Overview



The St Louis Industrial market is still going strong as the market absorbed over 1,000,000 SF during the quarter.



As class A space becomes increasingly scarce, Landlords are less likely to be offering the free rent concessions that were being thrown in the deals even as recent as nine months ago.



Quoted lease rates are also ticking up as much as 10%-15%. This is a necessary trend if lease rates are to keep up with the construction cost and still make the exit spreads.



Holding firm to asking rates for non-credit tenants will be the trend until some of the planned speculative development comes out of the ground and forces competition.



Vacancy rates are expected to continue to decline through the end of the year.

Historical Vacancy & Net Absorption

Net Absorption (SF)

2,000,000

14% 12%

1,500,000

10% 1,000,000

500,000

4% 0

-500,000

0% 2013 Q3

2013 Q4

2014 Q1

2014 Q2

2014 Q3

Q3 2014 Market Overview by Property Type # of Bldgs

Warehouse Distribution Flex/R&D

Inventory (SF)

1,630 137,649,758

Total Available (SF)

Total Vacant (SF)

Total Direct Direct Vacant Vacancy Vacancy (SF) Rate (%) Rate (%)

Available Sublease (SF)

Quarterly Net YTD Total Net Absorption Absorption (SF) (SF)

17,723,563 14,327,528 10.4% 14,094,947 10.2% 528,581

1,112,641

2,884,253

25,000

(1,892)

60,921

283

12,091,935

1,762,334

1,259,004 10.4% 1,254,004 10.4%

Light Industrial

1,583

33,709,643

2,616,512

1,873,550

5.6% 1,873,550

5.6%

8,912

82,684

206,539

Manufacturing

438

40,110,665

2,882,198

2,652,704

6.6% 2,442,144

6.1% 210,560

(99,567)

(201,602)

Truck Terminal

1,807,262

99,745

5.5%

8.8% 773,053

1,093,866

2,950,111

Grand Total

3,978 225,369,263

25,084,352 20,212,531

99,745

9.0% 19,764,390

Overview by Submarket/ Building Class

# of Bldgs

Saint Louis City

Total Available (SF)

Inventory (SF)

Total Direct Available Total Vacant Direct Vacant Vacancy Vacancy Sublease (SF) (SF) Rate (%) Rate (%) (SF)

Quarterly Net Absorption (SF)

YTD Total Net Absorption (SF)

1,051

57,919,890

8,520,403

6,946,147 12.0%

6,864,953 11.9% 201,194

183,967

751,561

Whse-Dist

489

38,900,902

7,212,088

5,967,459 15.3%

5,886,265 15.1% 201,194

198,038

764,790

Flex/R&D

1,405,209

137,096

9.8%

137,096

9.8%

4,500

7,035

Light Industrial

427

9,504,176

833,299

541,872

5.7%

541,872

5.7%

16,014

41,208

Manufacturing

7,166,221

302,090

263,890

3.7%

263,890

3.7%

(34,585)

(61,472)

Truck Terminal

943,382

35,830

3.8%

35,830

3.8%

Mid St Louis Co

578

25,229,761

2,568,460

2,124,342

8.4%

2,124,342

8.4%

(19,361)

302,968

Whse-Dist

186

12,114,768

1,375,779

1,120,520

9.2%

1,120,520

9.2%

23,905

308,615

Flex/R&D

1,398,460

168,043

155,735 11.1%

4,217

42,666

Light Industrial

289

6,041,293

567,142

390,591

6.5%

390,591

6.5%

(51,605)

(30,519)

Manufacturing

5,675,240

457,496

8.1%

457,496

8.1%

4,122

(17,794)

Truck Terminal

0.0%

North St Louis Co

563

45,468,933

5,651,648

4,756,645 10.5%

4,636,610 10.2% 120,035

817,474

772,924

Whse-Dist

290

30,689,728

3,840,427

3,188,174 10.4%

3,073,139 10.0% 115,035

782,257

690,868

Flex/R&D

2,714,399

413,472

256,478

9.4%

251,478

9.3%

5,000

15,438

24,664

Light Industrial

153

3,198,118

328,656

272,900

8.5%

272,900

8.5%

49,829

70,074

Manufacturing

8,597,273

1,005,178

975,178 11.3%

(30,050)

(12,682)

Truck Terminal

269,415

63,915

63,915 23.7%

West St Louis Co

172

6,650,299

529,923

336,191

5.1%

336,191

5.1%

(9,711)

(37,720)

Whse-Dist

2,202,756

232,920

155,956

7.1%

155,956

7.1%

(3,000)

(4,625)

Flex/R&D

1,511,324

183,889

73,421

4.9%

73,421

4.9%

(10,086)

(9,970)

Light Industrial

1,647,914

88,499

82,199

5.0%

82,199

5.0%

3,375

(12,625)

Manufacturing

1,288,305

24,615

1.9%

24,615

1.9%

(10,500)

Truck Terminal

0.0%

South St Louis Co

423

18,361,708

1,830,343

1,225,195

6.7%

1,225,195

6.7% 118,387

16,916

751,178

Whse-Dist

131

7,654,192

1,238,156

733,977

9.6%

733,977

9.6% 118,387

9,450

537,236

Flex/R&D

1,112,374

123,329

99,792

9.0%

99,792

9.0%

(10,425)

30,248

Light Industrial

179

3,466,002

255,597

202,843

5.9%

202,843

5.9%

26,773

44,976

Manufacturing

5,994,007

213,261

188,583

3.1%

188,583

3.1%

(8,882)

138,718

Truck Terminal

135,133

0.0%

Overview by Submarket/ Building Class

# of Bldgs

Westport

Total Available (SF)

Inventory (SF)

Total Direct Available Total Vacant Direct Vacant Vacancy Vacancy Sublease (SF) (SF) Rate (%) Rate (%) (SF)

289

13,085,621

2,062,705

1,667,067 12.7%

Whse-Dist

122

6,945,154

983,838

761,517 11.0%

725,165 10.4%

Flex/R&D

2,280,869

589,756

442,570 19.4%

Light Industrial

1,706,037

154,323

128,192

Manufacturing

2,153,561

334,788

Truck Terminal

482

Whse-Dist Flex/R&D

YTD Total Net Absorption (SF)

186,729

(13,008)

73,965

209,657

202,305

20,000

(5,536)

(35,032)

7.5%

8,912

22,894

67,705

334,788 15.5%

0.0%

23,423,958

1,301,336

840,389

3.6%

840,389

3.6%

(5,897)

52,700

177

12,762,789

708,180

567,670

4.4%

567,670

4.4%

(20,681)

32,362

1,358,690

141,887

91,487

6.7%

91,487

6.7%

1,310

Light Industrial

206

4,764,993

302,893

169,472

3.6%

169,472

3.6%

18,144

22,388

Manufacturing

4,158,742

148,376

11,760

0.3%

11,760

0.3%

(3,360)

Truck Terminal

378,744

0.0%

Illinois North

171

24,303,594

1,642,518

1,369,459

5.6%

1,369,459

5.6%

20,000

(91,225)

73,547

Whse-Dist

106

20,053,383

1,449,419

1,179,419

5.9%

1,179,419

5.9%

20,000

(88,485)

79,215

53,691

4,862

2,425

4.5%

2,425

4.5%

Light Industrial

846,994

39,403

38,781

4.6%

38,781

4.6%

(2,740)

(5,668)

Manufacturing

3,338,738

148,834

4.5%

148,834

4.5%

Truck Terminal

10,788

0.0%

Illinois South

249

10,925,499

977,016

947,096

8.7%

736,536

6.7% 210,560

14,974

295,961

Whse-Dist

6,326,086

682,756

652,836 10.3%

1,500

273,487

Flex/R&D

256,919

0.0%

Light Industrial

134

2,534,116

46,700

1.8%

46,700

1.8%

9,000

Manufacturing

1,738,578

247,560

247,560 14.2%

37,000

2.1% 210,560

13,474

Truck Terminal

69,800

3,978

225,369,263

Saint Charles Co

Flex/R&D

Grand Total

25,084,352 20,212,531

7.5%

0.0%

1,630,715 12.5% 102,877

Quarterly Net Absorption (SF)

9.0% 19,764,390

0.0%

8.8% 773,053

(40,286) (247,986)

1,093,866 2,950,111

Vacancy & Lease Rates

Saint Louis City Whse-Dist Flex/R&D

Total Vacancy Rate %

Asking Weighted Direct Lease Rate (NNN)

2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 13.1% 13.3% 13.3% 12.3% 12.0% 16.2% 17.3% 17.3% 15.8% 15.3%

2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 $3.27 $2.84 $2.85 $2.98 $2.97 $3.03

$2.71

$2.72

$2.87

13.2%

10.3%

10.1%

9.8%

$8.60

$6.41

$6.40

$6.41

Light Industrial Manufacturing

7.3% 3.5%

6.1% 3.1%

5.8% 3.3%

5.9% 3.5%

5.7% 3.7%

$4.60

$4.69

$4.94

$3.19

$2.80

$3.69

Truck Terminal

0.0%

3.9%

3.8%

$0.00

Mid St Louis Co

11.1%

10.0%

9.9%

8.3%

8.4%

$3.88

$3.89

$3.87

$4.33

$4.34

Whse-Dist Flex/R&D

13.2% 12.2%

12.5% 14.4%

12.4% 12.5%

9.4% 11.4%

9.2% 11.1%

$2.52

$2.51

$2.53

$3.13

$3.20

$11.37

$10.77

$10.80

$11.45

$11.77

8.0% 9.3%

5.8% 8.1%

6.1% 8.2%

5.6% 8.1%

6.5% 8.1%

$4.34

$4.23

$4.38

$3.92

$3.96

Truck Terminal North St Louis Co

0.0% 13.1%

0.0% 12.0%

0.0% 12.5%

0.0% 12.0%

0.0% 10.5%

$3.69 $0.00 $3.93

$3.46 $0.00 $3.96

$3.46 $0.00 $4.01

$3.45 $0.00 $4.28

$3.47 $0.00 $4.38

Whse-Dist

13.8%

12.3%

13.1%

12.6%

10.4%

Flex/R&D Light Industrial

10.5% 11.6%

11.4% 10.8%

10.1% 11.7%

10.2% 10.0%

9.4% 8.5%

$3.29 $8.91 $4.21

$3.39 $8.91 $4.21

$3.49 $8.91 $4.03

$3.54 $10.29 $4.00

$3.61 $10.50 $4.41

Manufacturing

12.0%

11.2%

11.0%

11.3%

$3.85

$3.25

$3.73

$3.76

Truck Terminal Saint Charles Co

11.1% 6.4%

23.7% 3.7%

23.7% 3.9%

23.7% 3.6%

$8.00 $5.59

$8.00 $5.89

$8.00 $6.31

$8.00 $4.86

$8.00 $4.79

Whse-Dist Flex/R&D Light Industrial

7.4% 12.2% 6.8%

4.6% 7.3% 3.6%

4.4% 8.1% 4.7%

4.3% 7.2% 3.9%

4.4% 6.7% 3.6%

$5.45 $8.00 $4.86

$5.38 $8.00 $5.52

$5.05 $10.31 $5.64

$4.83 $10.31 $5.84

$4.99 $8.82 $5.91

Manufacturing Truck Terminal West St Louis Co

0.4% 0.0% 3.1%

0.2% 0.0% 4.3%

0.4% 0.0% 4.6%

0.2% 0.0% 4.9%

0.3% 0.0% 5.1%

$0.00 $0.00 $5.90

$0.00 $0.00 $5.69

$0.00 $0.00 $5.79

$3.00 $0.00 $5.93

$3.00 $0.00 $6.26

Whse-Dist Flex/R&D

5.9% 2.5%

6.2% 4.2%

6.5% 5.3%

6.9% 4.2%

7.1% 4.9%

$5.63 $8.00

$4.45 $7.98

$4.91 $7.98

$5.16 $7.98

$5.34 $7.98

Light Industrial

1.8%

4.2%

5.2%

5.0%

$5.26

$6.02

$6.92

Manufacturing

1.1%

1.9%

$0.00

Truck Terminal South St Louis Co

0.0% 11.8%

0.0% 10.9%

0.0% 9.4%

0.0% 6.8%

0.0% 6.7%

$0.00 $5.31

$0.00 $5.11

$0.00 $5.33

$0.00 $5.19

$0.00 $5.09

Whse-Dist

18.1%

16.7%

14.5%

9.7%

9.6%

$4.93

$4.68

$4.78

$4.79

$4.67

Flex/R&D Light Industrial

11.0% 7.8%

11.9% 7.7%

10.9% 6.6%

8.0% 6.7%

9.0% 5.9%

Manufacturing Truck Terminal

6.6% 0.0%

5.5% 0.0%

4.5% 0.0%

3.0% 0.0%

3.1% 0.0%

$8.34 $4.31 $3.88 $0.00

$8.30 $3.65 $3.88 $0.00

$8.37 $5.00 $3.88 $0.00

$8.46 $4.96 $3.88 $0.00

$8.34 $5.14 $3.88 $0.00

Light Industrial Manufacturing

Vacancy & Lease Rates

Westport Whse-Dist

Total Vacancy Rate %

Asking Weighted Direct Lease Rate (NNN)

2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 12.4% 12.7% 12.6% 14.2% 12.7% 13.3% 13.9% 13.1% 14.0% 11.0%

2013 Q3 2013 Q4 2014 Q1 2014 Q2 2014 Q3 $4.65 $4.70 $5.25 $5.07 $5.08 $4.37

$4.47

$4.63

$4.39

Flex/R&D

17.4%

18.2%

20.2%

19.2%

19.4%

$7.25

$6.98

$8.56

$8.42

$8.38

Light Industrial Manufacturing

11.2% 5.5%

11.5% 4.1%

9.9% 5.0%

8.9% 13.8%

7.5% 15.5%

$0.00

$5.95

$6.14

$5.50

$5.18

$5.56

Truck Terminal

0.0%

$0.00

Illinois North

6.9%

5.6%

6.0%

5.5%

5.6%

$3.17

$3.36

$3.35

$3.21

Whse-Dist Flex/R&D

6.9% 2.8%

5.9% 4.5%

6.4% 4.5%

5.7% 4.5%

5.9% 4.5%

$3.18

$3.38

$3.36

$3.22

$0.00

Light Industrial Manufacturing

12.7% 6.0%

3.9% 4.5%

4.3% 4.5%

4.6% 4.5%

$2.75

Truck Terminal Illinois South

0.0% 33.7%

0.0% 10.6%

0.0% 8.0%

0.0% 8.7%

$0.00 $0.00 $2.65

$0.00 $0.00 $2.76

$0.00 $0.00 $2.67

$0.00 $0.00 $2.70

Whse-Dist

29.1%

13.3%

9.0%

10.3%

Flex/R&D Light Industrial

0.0% 13.7%

0.0% 2.2%

0.0% 1.8%

$2.50 $0.00 $5.00

$2.63 $0.00 $5.00

$2.58 $0.00 $5.00

$2.60 $0.00 $5.00

Manufacturing

54.6%

15.0%

14.2%

$0.00

Truck Terminal

0.0%

$0.00

11.6%

10.3%

10.2%

9.4%

9.0%

$3.79

$3.71

$3.82

$3.92

$3.94

Grand Total

Vacancy & Lease Rates [continued]

Asking Lease Rate Range by Type (NNN) $25.00

Asking Lease Rate (NNN)

$20.00

$15.00

$11.55 $10.00

$9.60 $8.00 $6.50

$5.00 $3.38 $0.00

$4.00

$1.00 Warehouse Distribution

$4.61

$3.83 $2.80

$0.70 Flex/R&D

Light Industrial

Manufacturing

Truck Terminal

Biggest Absorption Changes

Property Name

SF Occupied or Vacated

Company Name

Market

Type

13330 Lakefront Dr

542,500

True Manufacturing

North St Louis County

Whse/Dist

DukePort IX

104,556

Wainwright Industries, Inc

North St Louis County

Whse/Dist

2150 S 59th St

55,453

Police Department, Evidence Department

St Louis City

Whse/Dist

6501 Hall St

39,928

World Wide Technology Holdings

St Louis City

Whse/Dist

8404-8476 Mid County Industrial Dr.

37,866

United Industries Corporation

Mid St Louis County

Whse/Dist

11715-11733 Dunlap Industrial Dr.

27,316

3PD (Expansion)

Westport

Whse/Dist

1315 St Cherokee St

25,000

Loy-Lange Box Co

St Louis City

Whse/Dist

10814-10818 Midwest Industrial Blvd

-41,410

Color Associates

Mid St Louis County

Light Industrial

1600 Park #70 Blvd-Bldg A

-45,620

GT Advanced

North St Louis County

Whse/Dist

1700 Kosciusko St

-81,194

Jeffco Cartage Inc

St Louis City

Whse/Dist

Midwest Medical Supply

-89,600

Legacy Pharmaceutical

North St Louis County

Whse/Dist

5401 Collinsville Rd

-100,130

H & R Block

Illinois North

Whse/Dist

900 N Main Ctr

-107,000

Steel Shop Tennis Club

St Charles County

Whse/Dist

Available Space

Largest Blocks of Available Space 40 35 30 25 20 15

10 5 0 Saint Louis City

Mid St Louis County

North St Louis County

West St Louis County

100K+

South St Louis County

50-100K

Westport

Saint Charles County

Illinois North

Illinois South

25-50K

Quarter

100K+

50-100K

25-50K

2013 Q3

124

2013 Q4

128

2014 Q1

135

2014 Q2

126

2014 Q3

118

Notable Transactions

Key Lease Transactions Property Name

SF Leased

Tenant

Market

Type

13330 Lakefront Dr

542,500

True Manufacturing

North St Louis County

Whse/Dist

1659 Sauget Business Blvd.

202,019

Stellar Manufacturing

Illinois South

Whse/Dist

13201-13221 Corporate Exchange Dr

104,556

Wainwright Industries

North St Louis County

Whse/Dist

2609-2629 Rock Hill Industrial Ct

58,265

Milpaws (Renewal)

Mid St Louis County

Light Industrial

4001-4045 Lakefront Ct

42,680

East Coast Metal Distributors (Renewal)

North St Louis County

Whse/Dist

6501 Hall St

39,928

World Wide Technology Holding Co St Louis City

Whse/Dist

Hazelwood Business Center

36,000

North St Louis County

Whse/Dist

Ohio Transmission

Key Sale Transactions Property Name

SF Sold

Buyer Name

Market

Type

1730-1750 Conestoga St

96,000

Fry Investment Co.

North St Louis County

Whse/Dist

1376 Miners Dr

60,000

Metropolitan St Louis Sewer District St Louis City

Whse/Dist

Nelson Pipeline Constructors Inc

57,932

R & J Criebaum

St Charles County

Whse/Dist

7247-7249 W 116th Ave Portfolio

40,786

Sunrise Real Estate Property Group LLC

Westport

Whse/Dist

45 Progress Pkwy

38,600

Salt Creek Holdings LLC

Westport

Whse/Dist

Vacancy & Absorption

Net Absorption by Type

Vacancy Rate by Type 11%

10.4%

1,200,000

10.4%

10%

1,000,000

8% 6.6%

7% 5.6%

5.5%

Net Absorption (SF)

Vacancy Rate (%)

800,000 600,000 400,000 200,000

(200,000)

0 (1,892) (99,567)

2,000,000

14%

1,643,034

11.6%

10.2%

10%

1,500,000

9.4%

9.0%

8% 6% 4%

Net Absorption (SF)

10.3% Vacancy Rate (%)

82,684

Net Absorption by Quarter

Vacancy Rate by Quarter 12%

1,112,641

1,093,866 1,000,000 699,650 500,000

292,974

279,010

2% 0%

(500,000)

2013 Q3

2013 Q4

2014 Q1

2014 Q2

2014 Q3

2013 2013 2014 2014 2014 Q3 Q4 Q1 Q2 Q3

Xceligent St Louis Contact This information has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy.

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Bonnie Devine (314) 452-3059 bdevine@xceligent.com Seth Brown (816) 914-9855 sbrown@xceligent.com James Cook (602) 363-6691 jcook@xceligent.com