Market & Economic Trends. Net Absorption 1 Q Q Q Q Q Q 2007 $0.77 $ % $ % $ % $ % 3.

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1 colliers international LAS VEGAS, NV Market Research INDUSTRIAL Second Quarter 2007 Summary For the fourth quarter in a row new completions have exceeded net absorption. Both new completions and net absorption were down this quarter from last. Industrial vacancy now stands at 4.4%, 0.1-point higher than last quarter, and 1.3-points higher than one year ago. Industrial asking rents increased by $.01 to $.82 psf NNN. This is $.07 higher than one year ago. Market Indicators Q Vacancy Net Absorption Construction Rental Rate Market & Economic Trends According to the Nevada Department of Employment, Training and Rehabilitation ( DETR ), the Las Vegas MSA s industrial-related employment increased by 1,500 jobs between March 2007 and May 2007, the most recent month of data available. Industrial-related employment has increased by 1.3% over the past two quarters. Most of this growth has been in the construction sector, where 1,400 jobs were created. Minor growth in the wholesale sector (+100 jobs) was countered by job loss in the manufacturing (-100 jobs) and transportation & warehousing (-100 jobs) sectors. Overall, the Las Vegas-Paradise MSA had an unemployment rate of 4.2% in May of 2007, less than the seasonally adjusted rate of 4.5% for the U.S. and 5.1% for California (as of April 2007). The state of Nevada had a seasonally-adjusted unemployment rate of 4.6%. Employment in industries traditionally associated with industrial space has often tracked closely with industrial vacancy. During the last two quarters, this has not been the case. While industrial employment decreased along with industrial occupancy from Q2, 2006 to Q4, 2006, the rebound of industrial employment over the last two quarters has not been matched by a similar rebound in industrial occupancy. This may be because the employment growth occurred primarily in the construction sector; more people on the job site does not necessarily translate into more leased industrial space. VACANCY VS RENTAL RATE 5.0% $0.81 $0.82 $ % $0.75 $0.76 $0.77 $ % $ % 4.0% 4.0% $ % $ % $ % $ % 3.1% Vacancy Asking Rental Rate $ % 1 Q Q Q Q Q Q 2007 $

2 Supply & Demand NORTHWEST 95 SOUTHWEST 215 WEST CENTRAL 215 NORTH LAS VEGAS AIRPORT EAST LAS VEGAS HENDERSON New completions will hopefully taper off by early If demand remains steady we should see a turn around by then, if not sooner. MARKET ACTIVITY Second Quarter Transactions This quarter, industrial completions were 1,286,688 sf. This is almost half that completed in Q1, At mid-year 2007, new completions averaged 1,779,306 sf per quarter. Last year, new completions averaged 1,364,902 sf per quarter. Warehouse/Distribution space constituted 54% of new completions in Q2, Approximately 45% of new completions were in the North Las Vegas submarket. These completions increased the Valley s industrial inventory to 96,383,134 sf. All of the four submarkets with new supply (Airport, Henderson, North Las Vegas and Southwest) posted an increase in vacancy. Forward industrial supply decreased to 7,915,286 sf in Q2, 2007 from Q1, 2007 s 8,130,645 sf. Of total forward supply, 37.2% was under construction, with Warehouse/ Distribution projects accounting for 77% of this space. The remaining 62.8% was planned space, 67% of which was Warehouse/ Distribution. Forward-supply was concentrated in North Las Vegas and the Southwest, making up 90% of this supply. 1 Forward supply is a combination of space under construction in a quarter and space planned to begin construction within the next 4 quarters. Net absorption in Q2, 2007 was a healthy 1,084,649 sf. This was a decline from last quarter s 1,909,072 sf. New completions were higher than Q4 s net absorption, resulting in an absorption-to-completion ratio of 0.84:1. Net absorption was negative in the Airport submarket, and in the Incubator product types. Vacancy & Rates The Valley s industrial vacancy stood at 4.4% in Q2, This is 0.1 percentage points higher than Q1, 2007 s 4.3%, and 1.3 percentage points higher than one year ago. Asking rental rates for industrial space in the Valley averaged $0.82 psf NNN. This is a $0.01 increase over last quarter, and a $0.07 increase from one year ago. Vacancy rates are beginning to level off after increasing for the last four quarters. Three submarkets posted a decrease in vacancy: East Las Vegas, Northwest, and West Central. The Valley s lowest vacancy rate, 2.8%, was in the West Central submarket. The North Las Vegas, Northwest, and Southwest submarkets all had vacancies higher than the Valley average. LEASE ACTIVITY Property Address LEASE DAte LEASE TERM Size Sq. Ft. LEASE RATE/Sq. Ft. type 4175 Arville St Jun months 41,986 $0.76 NNN Light Distribution 955 Grier Dr May months 16,388 $1.01 NNN Light Distribution 3650 E Post Rd Jun months 21,410 $0.92 NNN Light Distribution 3051 N Marion Dr Apr months 43,648 $0.44 NNN Warehouse/Distribution 6565 Arroyo Springs St Jun months 21,410 $0.72 NNN Warehouse/Distribution SALES ACTIVITY Property Address Sales DAte Sale Price Size Sq. Ft. Sales Price/Sq. Ft. type 985 Trade Dr May-07 $13,535, ,585 $ Warehouse/Distribution 821 Grier Dr May-07 $10,000,000 44,631 $ Warehouse/Distribution 4780 N Lamb Blvd Apr-07 $5,670,284 63,000 $90.00 Warehouse/Distribution 4581 Eaker St Apr-07 $4,750,000 27,576 $ Warehouse/Distribution 4489 E Sahara Ave May-07 $3,500,000 15,661 $ Light Industrial 2

3 UPdate Market Comparisons Submarket east north West Area Airport LAS vegas Henderson Las Vegas Northwest Southwest Central TotalS TOTAL INDUSTRIAL MARKET Number of Existing Properties , ,790 Total Rentable Square Feet 13,271,523 2,826,128 10,794,588 27,802,342 1,262,428 28,323,291 12,102,834 96,383,134 Direct Vacant Square Feet 536, , ,624 1,270, ,774 1,402, ,909 4,282,371 Total Vacant Square Feet 539, , ,624 1,327, ,774 1,592, ,964 4,569,388 Total Available Square Feet 539, , ,624 1,327, ,774 1,592, ,964 4,569,388 Percent Direct Vacant 4.0% 3.6% 3.7% 4.6% 17.9% 5.0% 2.8% 4.4% Completions QTD 63, , , , ,286,688 Completions YTD 63, , , , ,286,688 Vacant Square Feet, End of Previous QTR 478, , ,730 1,381, ,374 1,067, ,476 3,717,481 Direct Net Absorption QTD -90,223 43, , ,639 24, ,570 23,859 1,084,649 Direct Net Absorption YTD 341,571 52, ,209 1,193,359-33,400 1,251,801-46,480 2,993,721 Total Net Absorption QTD -90,223 45, , ,773 24,929-28,395-1, ,243 Total Net Absorption YTD 363,116 54, ,949 1,145,338-33,400 1,115,916-32,180 2,868,080 Average Lease Rate $0.94 $0.74 $0.77 $0.67 $0.83 $0.90 $0.93 $0.82 Sq. Ft. Currently Under Construction 50, ,000 1,579, , ,478,690 Sq. Ft. Currently Planned ,387 2,502, ,121, ,971,297 WAREHOUSE/DISTRIBUTION Number of Existing Properties Total Rentable Square Feet 4,746, ,075 6,074,102 16,577, ,661 10,681,141 1,869,113 41,103,042 Direct Vacant Square Feet 106, , , , , ,078,434 Total Vacant Square Feet 106,371 10,000 77, , , , ,202,945 Total Available Square Feet 106,371 10,000 77, , , , ,202,945 Percent Direct Vacant 2.2% 0.0% 1.3% 2.5% 65.2% 3.2% 0.0% 2.6% Completions QTD , , , ,607 Completions YTD , , , ,607 Vacant Square Feet, End of Previous QTR 50, , , , , ,085,828 Direct Net Absorption QTD 3, , , , ,575 Direct Net Absorption YTD -56, ,600 1,071, ,273, ,552,387 Total Net Absorption QTD 3, , , , ,064 Total Net Absorption YTD -56, ,600 1,014, ,215, ,437,876 Average Lease Rate $0.70 n/a $0.50 $0.54 $0.56 $0.81 n/a $0.64 Sq. Ft. Currently Under Construction ,000 1,520, , ,951,438 Sq. Ft. Currently Planned ,380 1,747, ,437, ,305,956 LIGHT DISTRIBUTION Number of Existing Properties Total Rentable Square Feet 2,768, ,779 1,366,583 4,256,866 58,800 5,767, ,242 15,331,617 Direct Vacant Square Feet 129,949 14, , , ,462 31,670 1,207,382 Total Vacant Square Feet 132,685 14, , , ,657 32,470 1,305,113 Total Available Square Feet 132,685 14, , , ,657 32,470 1,305,113 Percent Direct Vacant 4.7% 4.1% 9.0% 10.5% 0.0% 8.0% 4.2% 7.9% Completions QTD , , , ,980 Completions YTD , , , ,980 Vacant Square Feet, End of Previous QTR 113,290 27,000 26, ,314 11, ,191 18,000 1,008,953 Direct Net Absorption QTD 7,919 20,574 15,680 86, ,672-13, ,406 Direct Net Absorption YTD 105,057 12,126-28,518 50,750 11,067 8,132-13, ,944 Total Net Absorption QTD 7,919 20,574 15,680 90, ,165-13, ,543 Total Net Absorption YTD 102,321 12,126-28,518 59,239 11,067-41,764-13, ,801 Average Lease Rate $0.94 $0.80 $0.66 $0.63 n/a $0.88 $0.60 $0.76 Sq. Ft. Currently Under Construction , ,326 Sq. Ft. Currently Planned , , , ,328 3

4 UPdate Market Comparisons Submarket east north West Area Airport LAS vegas Henderson Las Vegas Northwest Southwest Central TotalS LIGHT INDUSTRIAL Number of Existing Properties ,188 Total Rentable Square Feet 2,889,299 1,091,357 2,130,401 5,775, ,483 8,309,524 6,810,536 27,233,108 Direct Vacant Square Feet 112,121 34,754 87, , , ,127 1,049,148 Total Vacant Square Feet 112,121 34,754 87, , , ,677 1,086,501 Total Available Square Feet 112,121 34,754 87, , , ,677 1,086,501 Percent Direct Vacant 3.9% 3.2% 4.1% 5.0% 0.0% 4.4% 2.4% 3.9% Completions QTD ,000 11, , ,586 Completions YTD ,000 11, , ,586 Vacant Square Feet, End of Previous QTR 161, ,682 24, , , ,001 1,060,224 Direct Net Absorption QTD -32,052 45,872 77,020 25, ,818 19, ,014 Direct Net Absorption YTD 189,510 71,928 59,223 26, ,086 13, ,602 Total Net Absorption QTD -32,052 45,872 77,020 25, ,743 10, ,539 Total Net Absorption YTD 213,791 71,928 59,223 26, ,889 26, ,085 Average Lease Rate $0.82 $0.81 $0.89 $0.70 n/a $0.94 $1.15 $0.88 Sq. Ft. Currently Under Construction 50, , , ,422 Sq. Ft. Currently Planned , , , ,323 INCUBATOR Number of Existing Properties Total Rentable Square Feet 1,808, , , ,507 99,427 2,502,308 2,418,111 8,029,443 Direct Vacant Square Feet 44,915 36,506 24,097 54, , , ,580 Total Vacant Square Feet 44,915 36,506 24,097 54, , , ,002 Total Available Square Feet 44,915 36,506 24,097 54, , , ,002 Percent Direct Vacant 2.5% 12.2% 5.3% 12.3% 0.0% 3.8% 6.0% 5.0% Completions QTD Completions YTD Vacant Square Feet, End of Previous QTR 16,880 11,044 17,702 32, ,536 90, ,113 Direct Net Absorption QTD -14,436-16,580-10,346-5, ,650 18,027-9,431 Direct Net Absorption YTD -28,035-25,462-6,395-22, ,256-55, ,041 Total Net Absorption QTD -14,436-14,900-10,346-5, ,118 1,322-28,988 Total Net Absorption YTD -28,035-23,782-1,175-22, ,071-54, ,031 Average Lease Rate $1.30 $0.68 $0.93 $0.78 n/a $0.86 $0.75 $0.85 Sq. Ft. Currently Under Construction Sq. Ft. Currently Planned , ,800 R&D / FLEX Number of Existing Properties Total Rentable Square Feet 1,059, , , , ,057 1,063, ,832 4,685,924 Direct Vacant Square Feet 143,501 15,675 92,197 66,747 79, , ,827 Total Vacant Square Feet 143,501 15,675 92,197 66,747 79, , ,827 Total Available Square Feet 143,501 15,675 92,197 66,747 79, , ,827 Percent Direct Vacant 13.5% 11.0% 12.0% 8.9% 12.2% 13.9% 0.0% 11.6% Completions QTD 63, ,515 Completions YTD 63, ,515 Vacant Square Feet, End of Previous QTR 137,508 9,744 38, ,371 35, ,575 9, ,530 Direct Net Absorption QTD -54,723-5,931-18,737 67,624 24,929 50, ,085 Direct Net Absorption YTD 131,410-5,931-53,701 67,624-44,467 51,732 9, ,829 Total Net Absorption QTD -54,723-5,931-18,737 67,624 24,929 50, ,085 Total Net Absorption YTD 131,410-5,931-38,181 67,624-44,467 51,732 9, ,349 Average Lease Rate $1.10 $0.65 $0.98 $1.50 $1.32 $1.08 n/a $1.14 Sq. Ft. Currently Under Construction , , ,504 Sq. Ft. Currently Planned , , ,890 4

5 266 offices in 56 countries on 6 continents Asking rents increased in 5 of the Valley s 7 submarkets: Airport, East Las Vegas, Henderson, North Las Vegas, and West Central. Of these five, East Las Vegas and West Central posted a decrease in vacancy. Asking rents increased for Warehouse/ Distribution, and Light Industrial space. Conclusion From Q1, 2002 to Q2, 2007, industrial vacancy has averaged 7.2%. Vacancy was generally above that average from 2002 through During that period, industrial completions averaged around 920,000 sf per quarter, while net absorption averaged around 840,000 sf per quarter. Developers reacted to the weakening industrial market by putting their new projects on hold. By 2005, demand was increasing dramatically. From Q1, 2005 to Q2, 2007, net absorption averaged nearly 1.5-million sf per quarter, and new completions jumped to 1.1-million sf per quarter. Developers reacted to the strengthening marketplace by building industrial space to meet the demand. Unfortunately, development does not stop on a dime. As the national and local economies slowed down, development of new industrial space continued to increase. While average quarterly absorption has remained close to 1.5-million sf during the first half of 2007, average quarterly new completions have jumped to almost 1.8-million sf. So demand has not dwindled, it has merely been outpaced by supply. Given this fact, the outlook for the industrial market is positive. Forward supply has decreased for the last two quarters. This means that as projects are completed, they are not being replaced in the pipeline. New completions will hopefully taper off by early If demand remains steady we should see a turn around by then, if not sooner. USA 95 Canada 17 Latin America 17 Asia Pacific 52 EMEA 85 $54 billion in annual transaction volume million square feet under management 10,171 Professionals Contact information 3960 Howard Hughes Parkway Suite 150 Las Vegas, NV United States Tel: Fax: Vic Donovan Managing Partner vdonovan@lvcolliers.com Tel: HISTORICAL NET ABSORPTION VS COMPLETIONS John Stater Research Manager jstater@lvcolliers.com Tel: ,500,000 2,000,000 1,500,000 Square 1,000,000 Feet Absorption Completions This report and other research materials may be found on our website at com. This quarterly report is a research document of Las Vegas, NV. Questions related to information herein should be directed to the Research Department at Information contained herein has been obtained from sources deemed reliable and no representation is made as to the accuracy thereof. Colliers Nevada, LLC dba is an independently owned and operated business and a member firm of Property Consultants, an affiliation of independent companies with over 240 offices throughout more than 50 countries worldwide. 500, ,768,519 1,457,799 1,731,795 1,163,305 1,626,174 2,029, , ,471 1,909,072 2,271,923 1,084,649 1,286,688 1 Q Q Q Q Q Q