The CoStar Industrial Report

Transcription

1 The CoStar Industrial Report T H I R D Q U A R T E R Palm Beach County Industrial Market

2 Palm Beach County Industrial Market THIRD QUARTER 2013 PALM BEACH COUNTY Table of Contents Table of Contents A Methodology B Terms & Definitions C Market Highlights & Overview CoStar Markets Inventory & Development Analysis Inventory & Development Analysis Select Top Under Construction Properties Select Top Deliveries Figures at a Glance Figures at a Glance by Building Type & Market Historical Figures at a Glance Leasing Activity Analysis Select Top Lease Transactions Sales Activity Analysis Sales Activity Analysis Select Top Sales Transactions Analysis of Individual CoStar Submarket Clusters th Street Market Arvida Pk of Commerce Market Austin Park/Hill/53rd Market Boca Raton East Market Boca Raton West Market Boynton Beach Market Central Palm Bch Area Market Delray Beach Market DtwnPB to Tri-RailSta Market Electronics Way Market Jupiter Market Lake Park East Market Lake Park West Market Lake Worth East Market Lake Worth West Market Lewis Terminals Market Palm Bch Cty Outlying Market Palm Beach Airport Market Palm Beach Gardens Market Port Area Market Southern Blvd Market West of Turnpike Market Westroads Area Market 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT A

3 PALM BEACH COUNTY THIRD QUARTER 2013 Palm Beach County Industrial Market Methodology The CoStar Industrial Report calculates Industrial statistics using CoStar Group's base of existing, under construction and under renovation Industrial buildings in each given metropolitan area. All Industrial building types are included, including warehouse, flex / research & development, distribution, manufacturing, industrial showroom, and service buildings, in both single-tenant and multi-tenant buildings, including owner-occupied buildings. CoStar Group's national database includes approximately 80.7 billion square feet of coverage in 3.5 million properties. All rental rates reported in the CoStar Industrial Report are calculated using the quoted rental rate for each property. For information on subscribing to CoStar s other products and services, please contact us at COSTAR, or visit our web site at Copyright 2013 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided as is and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CoStar Group, Inc L ST NW Washington, DC (800) NASDAQ: CSGP B THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.

4 Palm Beach County Industrial Market THIRD QUARTER 2013 PALM BEACH COUNTY Terms & Definitions Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet. Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long term lease on the space. Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset. Cap Rate: Short for capitalization rate. The Cap Rate is a calculation that reflects the relationship between one year s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price). CBD: Abbreviation for Central Business District. (See also: Central Business District) Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA. Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-of-a-kind floor plans. They can be an architectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fittings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality. Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building. These buildings typically have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors. Class C: A classification used to describe buildings that generally qualify as no-frills, older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors. Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries) Contiguous Blocks of Space: Space within a building that is, or is able to be joined together into a single contiguous space. Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property. Delivery Date: The date a building completes construction and receives a certificate of occupancy. Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepreneurial efforts. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased. : The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door, even though the door may be glassed in or sealed off. Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance. Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space. Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time, generally due to the construction of new buildings. Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing, distribution, and maintenance facilities. The primary purpose of the space is for storing, producing, assembling, or distributing product. Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep. Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are buildingtype specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets) 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT C

5 PALM BEACH COUNTY THIRD QUARTER 2013 Palm Beach County Industrial Market Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different tenant needs. (See also: Tenancy). Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space. Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs. New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant. Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant. Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufacturing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor. Owner: The company, entity, or individual that holds title on a given building or property. Planned/Proposed: The status of a building that has been announced for future development but not yet started construction. Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date. Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA). Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the various systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly. Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease. RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area) Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets) Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant. Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis. Sales Price: The total dollar amount paid for a particular property at a particular point in time. Sales Volume: The sum of sales prices for a given group of buildings in a given time period. Seller: The individual, group, company, or entity that sells a particular commercial real estate asset. SF: Abbreviation for Square Feet. Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy) Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market). Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metropolitan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD) Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant) Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep. Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied. Under Construction: The status of a building that is in the process of being developed, assembled, built or constructed. A building is considered to be under construction after it has begun construction and until it receives a certificate of occupancy. Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. : Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be considered vacant space. Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise, rental rate averages include both Direct and Sublet available spaces. Year Built: The year in which a building completed construction and was issued a certificate of occupancy. YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through whatever time period is being studied. D THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.

6 Palm Beach County Industrial Market OVERVIEW THIRD QUARTER 2013 PALM BEACH COUNTY Palm Beach County s Stays at 7.0% Net Absorption Positive 37,741 SF in the Quarter The Palm Beach County Industrial market ended the third quarter 2013 with a vacancy rate of 7.0%. The vacancy rate was unchanged over the previous quarter, with net absorption totaling positive 37,741 square feet in the third quarter. Vacant sublease space increased in the quarter, ending the quarter at 142,189 square feet. Rental rates ended the third quarter at $8.51, an increase over the previous quarter. There was 500,000 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Palm Beach County Industrial market was positive 37,741 square feet in the third quarter That compares to positive 361,532 square feet in the second quarter 2013, positive 392,591 square feet in the first quarter 2013, and positive 198,436 square feet in the fourth quarter Some of the notable move-out s occurring in 2013 include: Carr Company moving out of (37,632) square feet at 600 Park of Commerce; Ocwen Financial moving out of (30,000) square feet at 2001 Australian Ave; and My Dinette moving out of (29,457) square feet at Gateway. Some of the notable move-in s occurring in 2013 include: Solar Tech moving into 75,000 square feet at 1800 Old Dixie; Ocwen Financial moving into 51,931 square feet at 5720 Premier Park Drive; and Rising Stars Gymnastics moving into 20,000 square feet at 65)) W Rogers Cir. The Flex building market recorded net absorption of positive 6,658 square feet in the third quarter 2013, compared to positive 48,732 square feet in the second quarter 2013, positive 26,742 in the first quarter 2013, and negative (2,673) in the fourth quarter The Warehouse building market recorded net absorption of positive 31,083 square feet in the third quarter 2013 compared to positive 312,800 square feet in the second quarter 2013, positive 365,849 in the first quarter 2013, and positive 201,109 in the fourth quarter The Industrial vacancy rate in the Palm Beach County market area remained at 7.0% at the end of the third quarter The vacancy rate was 7.0% at the end of the second quarter 2013, 7.7% at the end of the first quarter 2013, and 8.3% at the end of the fourth quarter Flex projects reported a vacancy rate of 10.6% at the end of the third quarter 2013, 10.5% at the end of the second quarter 2013, 10.9% at the end of the first quarter 2013, and 11.1% at the end of the fourth quarter Warehouse projects reported a vacancy rate of 6.1% at the end of the third quarter 2013, 6.2% at the end of second quarter 2013, 6.8% at the end of the first quarter 2013, and 7.6% at the end of the fourth quarter Notable Lease Signings Some of the notable lease signings occurring in 2013 include: the 70,685 square foot renewal and expansion signed by Woodfield Distribution, LLC at 951 Clint Moore Rd in the Arvida Park of Commerce IND Market; the 58,051-square-foot lease signed by Alumiglass LLC at Duke Realty Gateway Center - Building 3 in the Boynton Beach market; and the 51,947-square- Rates by Building Type % Flex Warehouse Total Market 16% 14% 12% Rate 10% 8% 6% 4% 2% 0% COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 1

7 PALM BEACH COUNTY THIRD QUARTER 2013 Palm Beach County Industrial Market OVERVIEW foot deal signed by Ocwen Financial at Duke Realty Park of Commerce - Building 3 in the 45th Street market. Sublease The amount of vacant sublease space in the Palm Beach County market increased to 142,189 square feet by the end of the third quarter 2013, from 141,739 square feet at the end of the second quarter There was 147,309 square feet vacant at the end of the first quarter 2013 and 163,793 square feet at the end of the fourth quarter Palm Beach County s Flex projects reported vacant sublease space of 25,500 square feet at the end of third quarter 2013, down from the 26,300 square feet reported at the end of the second quarter There were 26,300 square feet of sublease space vacant at the end of the first quarter 2013, and 32,100 square feet at the end of the fourth quarter Warehouse projects reported increased vacant sublease space from the second quarter 2013 to the third quarter Sublease vacancy went from 115,439 square feet to 116,689 square feet during that time. There was 121,009 square feet at the end of the first quarter 2013, and 131,693 square feet at the end of the fourth quarter Rental Rates The average quoted asking rental rate for available Industrial space was $8.51 per square foot per year at the end of the third quarter 2013 in the Palm Beach County market area. This represented a 1.3% increase in quoted rental rates from the end of the second quarter 2013, when rents were reported at $8.40 per square foot. The average quoted rate within the Flex sector was $11.01 per square foot at the end of the third quarter 2013, while Warehouse rates stood at $7.87. At the end of the second quarter 2013, Flex rates were $10.93 per square foot, and Warehouse rates were $7.77. U.S. Comparison Past 9 Quarters Rate Source: CoStar Property q Palm Beach County q q 2013 United States q 2013 Deliveries and Construction During the third quarter 2013, no new space was completed in the Palm Beach County market area. This compares to no completions in the second quarter 2013, one building totaling 2,607 square feet completed in the first quarter 2013, and nothing completed in the fourth quarter There were 500,000 square feet of Industrial space under construction at the end of the third quarter The only delivery in 2013 has been 2976 Lark Rd, a 2,607- square-foot facility that delivered in first quarter 2013 and is now 100% occupied. The only project under construction at the end of third quarter 2013 was 952 Jupiter Park Ln, a 20,900-square-foot building with 76% of its space pre-leased. Inventory Total Industrial inventory in the Palm Beach County market area amounted to 59,138,443 square feet in 3,208 buildings as of the end of the third quarter The Flex sector consisted of 12,210,286 square feet in 607 projects. The Warehouse sector consisted of 46,928,157 square feet in 2,601 buildings. Within the Industrial market there were 392 owner-occupied buildings accounting for 11,311,789 square feet of Industrial space. Sales Activity Tallying industrial building sales of 15,000 square feet or larger, Palm Beach County industrial sales figures fell during the second quarter 2013 in terms of dollar volume compared to the first quarter of In the second quarter, seven industrial transactions closed with a total volume of $15,261,991. The seven buildings totaled 185,152 square feet and the average price per square foot equated to $82.43 per square foot. That compares to nine transactions totaling $16,020,100 in the first quarter. The total square footage was 339,464 for an average price per square foot of $ Total year-to-date industrial building sales activity in 2013 is up compared to the previous year. In the first six months of 2013, the market saw 16 industrial sales transactions with a total volume of $31,282,091. The price per square foot has averaged $59.63 this year. In the first six months of 2012, the market posted 14 transactions with a total volume of $21,483,530. The price per square foot averaged $ Cap rates have been lower in 2013, averaging 7.25%, compared to the first six months of last year when they averaged 9.13%. One of the largest transactions that has occurred within the last four quarters in the Palm Beach County market is the sale of Delray Distribution Center in Delray Beach. This 203,936-squarefoot industrial building sold in August of 2012 for $8,800,000, or $43.15 per square foot. Reports compiled by: Jeff Miles & John Kneisly, CoStar Research Managers and the South Florida Research Staff. 2 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.

8 Palm Beach County Industrial Market MARKETS THIRD QUARTER 2013 PALM BEACH COUNTY CoStar Submarkets In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called Markets, Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets are then divided into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group. Submarket Clusters 45th Street Ind Arvida Pk of Commerce Ind Austin Park/Hill/53rd Ind Boca Raton East Ind Boca Raton West Ind Boynton Beach Ind Central Palm Bch Area Ind Delray Beach Ind DtwnPB to Tri-RailSta Ind Electronics Way Ind Jupiter Ind Lake Park East Ind Lake Park West Ind Lake Worth East Ind Lake Worth West Ind Lewis Terminals Ind Palm Bch Cty Outlying Ind Palm Beach Airport Ind Palm Beach Gardens Ind Port Area Ind Southern Blvd Ind West of Turnpike Ind Westroads Area Ind 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 3

9 PALM BEACH COUNTY THIRD QUARTER 2013 Palm Beach County Industrial Market INVENTORY & DEVELOPMENT Historical Deliveries Deliveries Average Delivered SF Millions of SF * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction RBA Under Construction Inventory Average Bldg Size Market # Bldgs Total RBA Preleased SF Preleased % All Existing U/C West of Turnpike Ind 1 500, , , ,000 Westroads Area Ind ,921 0 Arvida Pk of Commerce Ind ,233 0 Austin Park/Hill/53rd Ind ,535 0 Boca Raton East Ind ,253 0 Boca Raton West Ind ,307 0 Boynton Beach Ind ,553 0 Central Palm Bch Area Ind ,549 0 Delray Beach Ind ,157 0 DtwnPB to Tri-RailSta Ind ,349 0 All Other ,305 0 Totals 1 500, , , ,000 Recent Deliveries Leased & Un-Leased SF in Deliveries Since Leased Un-Leased 0.3 Millions of SF THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.

10 Palm Beach County Industrial Market INVENTORY & DEVELOPMENT THIRD QUARTER 2013 PALM BEACH COUNTY Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 0.6 Construction Starts Deliveries Millions of SF q q q q Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant < 50,000 SF 2 23,507 18, % $ ,607 20,900 50,000 SF - 99,999 SF $ ,000 SF - 249,999 SF $ ,000 SF - 499,999 SF $ 0 0 >= 500,000 SF $ 0 0 Recent Development by Tenancy Comparison Based on RBA Developed for Single & Multi-Tenant Use Based on Total RBA 2013 Deliveries Currently Under Construction By Building Type By Tenancy Type 0% 0% 21% 34% 79% 66% 100% 100% Multi Single Multi Single Flex Warehouse Multi Single 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 5

11 PALM BEACH COUNTY THIRD QUARTER 2013 Palm Beach County Industrial Market INVENTORY & DEVELOPMENT 6 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.

12 Palm Beach County Industrial Market FIGURES AT A GLANCE THIRD QUARTER 2013 PALM BEACH COUNTY Flex Market Statistics Third Quarter 2013 YTD Net YTD Under Market # Blds Total RBA Total SF Vac % Absorption Deliveries Const SF Rates 45th Street Ind , , , % 8, $9.54 Arvida Pk of Commerce Ind 54 2,583, , , % 20, $11.93 Austin Park/Hill/53rd Ind ,902 51,941 51, % 4, $7.62 Boca Raton East Ind 59 1,012,031 64,673 64, % 7, $14.19 Boca Raton West Ind 2 44,000 7,734 7, % (4,070) 0 0 $12.00 Boynton Beach Ind ,963 53,154 53, % 8, $9.21 Central Palm Bch Area Ind ,540 64,585 64, % 27, $7.02 Delray Beach Ind ,702 66,800 66, % (11,950) 0 0 $11.16 DtwnPB to Tri-RailSta Ind ,141 14,366 14, % (2,700) 0 0 $16.48 Electronics Way Ind 9 184, , $7.38 Jupiter Ind ,993 90,678 90, % 4, $14.73 Lake Park East Ind $ Lake Park West Ind ,057 20,899 20, % 1, $9.40 Lake Worth East Ind ,762 56,003 56, % (13,450) 0 0 $9.87 Lake Worth West Ind ,580 32,119 32, % 3, $9.24 Lewis Terminals Ind 5 82, $4.25 Palm Bch Cty Outlying Ind 5 230,000 16,193 16, % $8.75 Palm Beach Airport Ind , , , % $11.13 Palm Beach Gardens Ind ,247 66,384 66, % 4, $11.65 Port Area Ind $ Southern Blvd Ind 4 51, $ West of Turnpike Ind 51 1,391, , , % 16, $11.07 Westroads Area Ind 7 146,278 4,860 4, % $10.80 Totals ,210,286 1,266,662 1,292, % 82, $11.01 Warehouse Market Statistics Third Quarter 2013 YTD Net YTD Under Market # Blds Total RBA Total SF Vac % Absorption Deliveries Const SF Rates 45th Street Ind 34 1,123,740 13,000 13, % 68, $7.30 Arvida Pk of Commerce Ind 54 2,841, , , % (62,157) 0 0 $9.08 Austin Park/Hill/53rd Ind 120 2,521, , , % 48, $6.20 Boca Raton East Ind 164 2,166,288 57,260 58, % 33, $8.83 Boca Raton West Ind 5 147,151 5,202 5, % $ Boynton Beach Ind 200 4,226, , , % 56, $7.56 Central Palm Bch Area Ind 157 4,901, , , % 69, $7.75 Delray Beach Ind 154 2,370, , , % 53, $8.63 DtwnPB to Tri-RailSta Ind 139 1,936,046 95,024 95, % 25, $7.22 Electronics Way Ind 146 1,452, , , % (22,207) 0 0 $7.76 Jupiter Ind 200 2,178,355 78,069 78, % 12, $10.57 Lake Park East Ind ,437 16,155 16, % $9.95 Lake Park West Ind 139 1,502,508 97,142 97, % 9, $9.96 Lake Worth East Ind 282 2,085,521 99,989 99, % 30, $6.28 Lake Worth West Ind 95 2,246,002 82,393 82, % 32,260 2,607 0 $7.98 Lewis Terminals Ind 101 3,115, , , % 193, $5.50 Palm Bch Cty Outlying Ind 53 2,545,243 82,653 82, % 91, $9.06 Palm Beach Airport Ind 251 3,301, , , % 59, $7.91 Palm Beach Gardens Ind ,448 30,734 30, % 16, $9.41 Port Area Ind ,917 30,643 30, % (2,303) 0 0 $ Southern Blvd Ind ,680 40,760 40, % (22,420) 0 0 $9.76 West of Turnpike Ind 120 2,201, , , % (23) 0 500,000 $9.35 Westroads Area Ind 73 2,087,383 26,440 54, % 16, $7.26 Totals 2,601 46,928,157 2,741,167 2,857, % 709,732 2, ,000 $ COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 7

13 PALM BEACH COUNTY THIRD QUARTER 2013 Palm Beach County Industrial Market FIGURES AT A GLANCE Total Industrial Market Statistics Third Quarter 2013 YTD Net YTD Under Market # Blds Total RBA Total SF Vac % Absorption Deliveries Const SF Rates 45th Street Ind 48 1,570, , , % 76, $8.33 Arvida Pk of Commerce Ind 108 5,425, , , % (42,115) 0 0 $10.31 Austin Park/Hill/53rd Ind 133 2,731, , , % 53, $6.56 Boca Raton East Ind 223 3,178, , , % 41, $10.22 Boca Raton West Ind 7 191,151 12,936 12, % (4,070) 0 0 $12.00 Boynton Beach Ind 251 5,158, , , % 65, $7.71 Central Palm Bch Area Ind 195 5,567, , , % 97, $7.68 Delray Beach Ind 181 2,924, , , % 42, $8.94 DtwnPB to Tri-RailSta Ind 161 2,149, , , % 22, $8.02 Electronics Way Ind 155 1,637, , , % (16,907) 0 0 $7.74 Jupiter Ind 240 2,996, , , % 17, $11.91 Lake Park East Ind ,437 16,155 16, % $9.95 Lake Park West Ind 169 1,831, , , % 11, $9.85 Lake Worth East Ind 352 2,526, , , % 16, $6.70 Lake Worth West Ind 143 2,843, , ,512 35,474 2,607 0 $8.29 Lewis Terminals Ind 106 3,198, , , % 193, $5.49 Palm Bch Cty Outlying Ind 58 2,775,243 98,846 98, % 92, $9.05 Palm Beach Airport Ind 296 4,294, , , % 60, $8.77 Palm Beach Gardens Ind ,695 97,118 97, % 21, $9.92 Port Area Ind ,917 30,643 30, % (2,303) 0 0 $ Southern Blvd Ind ,720 40,760 40, % (22,420) 0 0 $9.76 West of Turnpike Ind 171 3,592, , , % 16, ,000 $10.19 Westroads Area Ind 80 2,233,661 31,300 59, % 16, $7.28 Totals 3,208 59,138,443 4,007,829 4,150, % 791,864 2, ,000 $ THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.

14 Palm Beach County Industrial Market FIGURES AT A GLANCE THIRD QUARTER 2013 PALM BEACH COUNTY Flex Market Statistics Third Quarter 2013 Net Deliveries UC Inventory Period # Blds Total RBA Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates ,210,286 1,266,662 1,292, % 6, $ q ,189,386 1,251,620 1,277, % 48, ,900 $ ,189,386 1,300,352 1,326, % 26, ,900 $ q ,189,386 1,321,294 1,353, % (2,673) ,900 $ ,189,386 1,318,621 1,350, % 14, ,900 $ q ,189,386 1,333,079 1,365, % 76, $ ,189,386 1,409,548 1,441, % $ ,189,386 1,398,933 1,442, % 273, , $ ,165,386 1,631,841 1,691, % 245, ,000 $ ,165,386 1,880,935 1,937, % (510,483) 1 15, ,000 $ ,149,986 1,357,253 1,411, % 92, , ,400 $ ,783,939 1,114,595 1,137, % (22,720) , ,047 $ ,410, , , % (20,758) 7 227, ,589 $ ,183, , , % 731, , ,199 $ ,705, , , % 142, , ,018 $ ,499, , , % 348, , ,811 $9.80 Warehouse Market Statistics Third Quarter 2013 Net Deliveries UC Inventory Period # Blds Total RBA Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates ,601 46,928,157 2,741,167 2,857, % 31, ,000 $ q 2,605 46,980,135 2,775,500 2,890, % 312, $ ,605 46,980,135 3,082,730 3,203, % 365, , $ q 2,604 46,977,528 3,435,288 3,566, % 201, ,607 $ ,604 46,977,528 3,630,397 3,768,090 78, ,607 $ q 2,604 46,977,528 3,700,356 3,847, % 36, ,607 $ ,605 46,995,203 3,727,765 3,900, % 276, $ ,605 46,995,203 3,973,690 4,177, % 596, , $ ,601 46,746,942 4,224,407 4,525, % 645, , ,261 $ ,596 46,554,468 4,665,700 4,977, % (1,274,435) 3 26, ,974 $ ,593 46,527,513 3,538,320 3,676, % (21,720) , ,078 $ ,569 45,692,751 2,719,642 2,820, % (770,597) , ,671 $ ,548 45,193,692 1,550,356 1,550, % 230, , ,291 $ ,518 44,380, , , % 1,207, , ,996 $ ,495 43,824,507 1,618,572 1,619, % 1,448, ,052, ,275 $ ,460 43,322,445 2,538,290 2,565, % 517, ,203, ,930 $6.51 Total Industrial Market Statistics Third Quarter 2013 Net Deliveries UC Inventory Period # Blds Total RBA Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates ,208 59,138,443 4,007,829 4,150, % 37, ,000 $ q 3,211 59,169,521 4,027,120 4,168, % 361, ,900 $ ,211 59,169,521 4,383,082 4,530, % 392, , ,900 $ q 3,210 59,166,914 4,756,582 4,920, % 198, ,507 $ ,210 59,166,914 4,949,018 5,118, % 93, ,507 $ q 3,210 59,166,914 5,033,435 5,212, % 112, ,607 $ ,211 59,184,589 5,137,313 5,342, % 277, $ ,211 59,184,589 5,372,623 5,619, % 869, , $ ,206 58,912,328 5,856,248 6,216, % 890, , ,261 $ ,201 58,719,854 6,546,635 6,915, % (1,784,918) 4 42, ,974 $ ,197 58,677,499 4,895,573 5,087, % 70, ,200, ,478 $ ,160 57,476,690 3,834,237 3,957, % (793,317) , ,085,718 $ ,120 56,604,312 2,290,561 2,292, , ,040, ,880 $ ,083 55,564,025 1,391,546 1,461, % 1,938, ,061, ,195 $ ,041 54,530,146 2,362,735 2,366, % 1,590, ,286, ,293 $ ,000 53,821,672 3,149,420 3,248, , ,409, ,741 $ COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 9

15 PALM BEACH COUNTY THIRD QUARTER 2013 Palm Beach County Industrial Market LEASING ACTIVITY Historical Rental Rates Based on Rental Rates $12.00 Flex Warehouse Total Market $1 $8.00 $6.00 $4.00 $2.00 $ q by Available Space Type by Building Type Percent of All in Direct vs. Sublet Percent of All by Building Type Palm Beach County United States Palm Beach County United States 3% 3% 69% 31% 85% 15% 97% 97% Direct Sublet Direct Sublet Flex Warehouse Flex Warehouse U.S. Rental Rate Comparison Based on Average Rental Rates Future Space Available Space Scheduled to be Available for Occupancy* $9.00 $8.00 $7.00 Palm Beach County United States $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $ q Millions q q q 2015 * Includes Under Construction Space 10 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.

16 Palm Beach County Industrial Market LEASING ACTIVITY THIRD QUARTER 2013 PALM BEACH COUNTY Select Top Industrial Leases Based on Leased Square Footage For Deals Signed in 2013 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company Clint Moore Rd* Arvida Pk of Commerce Ind 70,685 3rd Woodfield Distribution, LLC NAI Rauch Weaver Norfleet Kurtz & C Cushman & Wakefield, Inc Quantum Blvd Boynton Beach Ind 58,051 1st Alumiglass LLC Direct Deal CBRE Premier Park Dr 45th Street Ind 51,947 1st Ocwen Financial CBRE CBRE Holland Dr Arvida Pk of Commerce Ind 41,362 2nd N/A N/A Colliers International, South Flori Park of Commerce Blvd Arvida Pk of Commerce Ind 38,039 2nd N/A N/A Jan Real Estate Co High Ridge Rd* Boynton Beach Ind 30,489 3rd Lawson Industries Inc. Direct Deal Duke Realty High Ridge Rd* Boynton Beach Ind 30,237 1st HGI Industries, Inc Touchstone Webb Realty Company Direct Deal Quantum Blvd Boynton Beach Ind 27,947 1st Zenaro Lighting Direct Deal CBRE Old Okeechobee Rd Palm Beach Airport Ind 27,851 1st Goodman Distribution Transwestern Dallas Duke Realty W 53rd St Austin Park/Hill/53rd Ind 27,290 3rd N/A N/A CBRE Park Of Commerce Blvd Palm Bch Cty Outlying Ind 24,045 3rd N/A N/A S&K Worldwide Realty, LLC NW 77th St Arvida Pk of Commerce Ind 23,680 1st N/A N/A Danburg Management Park of Commerce Blvd Arvida Pk of Commerce Ind 22,644 2nd N/A CBRE Butters Realty & Management Thor Dr Boynton Beach Ind 21,645 2nd N/A N/A William Koch Real Estate Neptune Dr Boynton Beach Ind 21,145 1st N/A Direct Deal William Koch Real Estate W Rogers Cir Arvida Pk of Commerce Ind 20,047 1st Rising Stars Gymnastics Incorporated Direct Deal CRE Rauch, Lupo, Robertson & Co Business Park Way West of Turnpike Ind 19,644 3rd N/A N/A NAI/Merin Hunter Codman Inc Commerce Rd Boynton Beach Ind 19,047 2nd Symmetrical Stair & Door Sperry Van Ness Commercial Realty CRE Rauch, Lupo, Robertson & Co NW 2nd Ave Boca Raton East Ind 18,047 3rd N/A N/A CBRE Old Okeechobee Rd* Palm Beach Airport Ind 17,951 3rd Lennox PartsPlus Industries Direct Deal CBRE Quantum Blvd Boynton Beach Ind 17,851 2nd Fitnessmith H&B Commercial CBRE NW 77th St Arvida Pk of Commerce Ind 16,947 1st Potions In Motion Bar Cat Inc Century 21 Tenace Realty Danburg Management Park of Commerce Blvd Arvida Pk of Commerce Ind 15,247 3rd N/A N/A CBRE th St 45th Street Ind 15,037 1st Osto Group Direct Deal Pebworth Properties, Inc Gateway Blvd Boynton Beach Ind 14,851 3rd Howard Fertilizer & Chemical Company, Inc. Direct Deal CBRE N Florida Mango Rd Palm Beach Airport Ind 14,439 2nd The Parts House N/A Malasky Properties, Inc E Rogers Cir Arvida Pk of Commerce Ind 14,051 1st N/A N/A Leder Realty and Management N Congress Ave Central Palm Bch Area Ind 13,942 1st PepsiCo, Inc N/A Fischer Gaeta Corp th St Electronics Way Ind 13,547 1st ISAE N/A Palm Beach Commercial Properties High Ridge Rd Boynton Beach Ind 12,347 1st Italian Terrazzo & Tile Company Cushman & Wakefield, Inc. CBRE Broken Sound Pky Arvida Pk of Commerce Ind 11,447 1st N/A N/A Liberty Property Trust Central Industrial Dr Central Palm Bch Area Ind 10,047 1st Daniel R Smith & Associates Direct Deal Cushman & Wakefield, Inc Georgia Ave Lake Worth East Ind 10,046 1st Ymax Communications N/A N/A NW 6th Ave Arvida Pk of Commerce Ind 10,045 1st N/A N/A Danburg Management Broken Sound Pky Arvida Pk of Commerce Ind 9,947 2nd N/A N/A Liberty Property Trust Barnett Dr Lake Worth West Ind 9,900 2nd N/A N/A NAI/Merin Hunter Codman Inc Riverside Dr Palm Beach Gardens Ind 9,255 3rd Hardwork Exercise Direct Deal Jon C. Schmid & Associates Garden Rd Central Palm Bch Area Ind 9,047 1st S&S Kitchen and Bathroom Direct Deal Palm Beach Commercial Properties Tall Pines Rd Southern Blvd Ind 8,739 3rd Straight Line Mill Work & Supply Direct Deal Cornerstone Realty, Inc Industrial Ave Boynton Beach Ind 7,244 1st East Coast Auto Services Direct Deal The Fitzgerald Group * Renewal 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 11

17 PALM BEACH COUNTY THIRD QUARTER 2013 Palm Beach County Industrial Market SALES ACTIVITY The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter 1 Cap Rate Price/SF $250 1 $200 Cap Rate Percentage $150 $100 Dollars/SF $ q q q q q q $0 Source: CoStar COMPS Sales Volume & Price Sales Analysis by Building Size Based on Industrial Building Sales of 15,000 SF and Larger Based on Industrial Bldg Sales From July June 2013 Sales Volume Price/SF Bldg Size # RBA $ Volume Price/SF Cap Rate $50 $90 Millions of Sales Volume Dollars $45 $40 $35 $30 $25 $20 $15 $10 $80 $70 $60 $50 $40 $30 $20 Price/SF < 25,000 SF ,713 $ 48,480,110 $ % 25K-99K SF ,462 $ 35,774,841 $ % 100K-249K SF 2 333,690 $ 15,400,000 $ $5 $10 $ q q q q q q $0 >250K SF $ - - Source: CoStar COMPS Source: CoStar COMPS U.S. Price/SF Comparison Based on Industrial Building Sales of 15,000 SF and Larger U.S. Cap Rate Comparison Based on Industrial Building Sales of 15,000 SF and Larger $90 Palm Beach County US 1 Palm Beach County US Dollars per SF $80 $70 $60 $50 $40 $30 $20 $10 Cap Rate Percentage 1 $ q q q q q q q q q q q q q q Source: CoStar COMPS Source: CoStar COMPS 12 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.

18 Palm Beach County Industrial Market SALES ACTIVITY THIRD QUARTER 2013 PALM BEACH COUNTY 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 13

19 PALM BEACH COUNTY THIRD QUARTER 2013 Palm Beach County Industrial Market 4 5 T H S T R E E T M A R K E T Deliveries, Absorption & (0.020) (0.040) Delivered SF Absorption SF q q q q 25.0% % 1 5.0% Rental Rates 0.30 $9.00 $ $ $8.70 $8.60 $8.50 $8.40 $8.30 $8.20 $8.10 $8.00 Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates ,570, , % 6, $ q 48 1,570, , % 49, $ ,570, , % 20, $ q 48 1,570, , % (12,079) $ ,570, , % 16, $ q 48 1,570, , % 25, $ ,570, , % 3, $ q 48 1,570, , , $ ,570, , % 9, $ q 48 1,570, , % 12, $ ,570, , % (29,023) $ q 48 1,570, , % 6, $ ,570, , % 34, $ q 48 1,570, , % 45, $ ,570, , % 21, , $ q 46 1,419, , % (10,166) ,123 $ THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.

20 Palm Beach County Industrial Market A R V I D A P K O F C O M M E R C E M A R K E T THIRD QUARTER 2013 PALM BEACH COUNTY Deliveries, Absorption & (0.020) (0.040) (0.060) (0.080) Delivered SF Absorption SF q q q q Rental Rates 0.64 $10.80 $ $ $10.50 $10.40 $10.30 $10.20 $10.10 $ $9.90 $ $9.70 Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates ,425, , % (62,609) $ q 108 5,425, , % 51, $ ,425, , % (30,891) $ q 108 5,425, , % (11,370) $ ,425, , % (8,630) $ q 108 5,425, , % 6, $ ,425, , % (12,274) $ q 108 5,425, , % 44, $ ,425, , % (4,119) $ q 108 5,425, , % 20, $ ,425, , % (3,958) $ q 108 5,425, , % 3, $ ,425, , % 107, $ q 108 5,425, , % 29, $ ,425, , % (45,925) $ q 108 5,425, , % 7, $ COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 15