Demand remains strong; available space in quality product is almost non-existent

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1 Palm Beach County Industrial, Q3 015 Demand remains strong; available space in quality product is almost non-existent Total Vacancy.% Lease Rate $.9 PSF Net Absorption 3,000 SF Completions 0 SF *Arrows indicate change from previous year. Figure : Total Vacancy vs Average Direct Asking Lease Rate (NNN) Vacancy (%) Vacancy Rate Average Asking Lease Rate 1 Asking Rate ($/SF) 1 Q 005 Q 00 Q 007 Q 00 Q 009 Q 0 Q 011 Q 0 Q 013 Q 01 Q3 015 LEASING ACTIVITY United Technologies Corporation plans to add 30 new jobs to their new location in Palm Beach Gardens. Construction costs increased due to the rise in residential development. Rents have moved upward for industrial properties. Occupancy levels are extremely high with tenants rushing to lock in leases and rates. Service driven small business owners are thriving in the Palm Beach County market as the population continues to grow through in-migration. Industrial demand resulted in over 1 million sq. ft. of net absorption as of Q The West Palm Beach submarket accounted for the bulk of activity with a total of 73,13 sq. ft. The total vacancy rate decreased 0 basis points (bps) year over year to a current rate of.%. Warehouse/distribution space saw the largest decrease of 1 bps to the current rate of 3.9%. Flex space experienced a decrease of 30 bps compared to this time last year, for a current rate of.%. Manufacturing space declined 0 bps from Q3 01 to the current rate of 1.%. The overall average asking Q3 015 CBRE Research 015 CBRE, Inc. 1

2 PALM BEACH COUNTY INDUSTRIAL Figure : Market Statistics Submarket Total Inventory Total Vacancy (%) Total Availability (%) Q3 015 Net Absorption YTD Net Absorption Under Construction Avg. Asking Lease Rate ($/SF/NNN) Boca Raton 7,9, (35,315) (33,05) 0.15 Boynton Beach,177, ,35 175, Delray Beach,73,.3.,00 5, Jupiter,1, ,, Lake Worth 3,071, (9,703) 0.7 Riviera Beach 9,9, ,50 170, West Palm Beach 1,31, , 73,13 50,000. Totals 5,033, ,01 1,05,195 50,000.9 Manufacturing,95, ,5 31, R&D/Flex 9,73, ,13 17,3 0.5 Whse/Distribution 30,337, ,39 1,005, Figure 3: Significant Q3 015 Leases Impacting Absorption Submarket Address Tenant Transaction SF Riviera Beach Beach 735 Central Industrial Drive Nassau Candy 3,37 Boynton Beach 19 High Ridge Road Atlas Party Rentals 39,907 Boynton Beach 00 SW 35 th Avenue Drapery Castle 30,000 Riviera Beach 1301 W 13 th Street Amarr Garage Doors 3,71 West Palm Beach rd Street AMF Building Products 1,90 Q3 015 CBRE Research 015 CBRE, Inc.

3 Figure : Significant Q3 015 Sale Transactions Submarket Address Buyer Seller Building SF Sale Price $ Boynton Beach 900 High Ridge Road JS Ende Family LP Kim Fender Trust 7,000 5,50,000 Riviera Beach 9000 Burma Road 9000 Burma Road, LLC Burma Road Partners, LLC,30,00,000 West Palm Beach 5900 N Australian Avenue 5900 Australian WPB, LLC 5900 Australian Avenue, LLC 0,395 3,500,000 Boca Raton 51 E Rogers Circle Lenmar Realty, LLC Lake Vista Center, LP 7,05,550,000 West Palm Beach 711 N Australian Avenue Genet Property Group GA 711 Australian Ave., LLC 9,0,00,000 LEASING ACTIVITY lease rate was up.% year over year coming in at $.9 per sq. ft. Rising rates stem from leasing activity by housing-related tenants that have grown to meet the demand of residential construction in Palm Beach County. Broken down by product type, the average asking lease rate for manufacturing properties experienced the largest increase at 0.5% year over year to $9. per sq. ft. In Q3 015, warehouse space increased.% from Q3 01 to $7. per sq. ft. The average rate for flex properties decreased 1.% year over year to $.5 per sq. ft. in Q The Boca Raton submarket had the highest average asking lease rate for warehouse/distribution space at $.95 per sq. ft. DEVELOPMENT located just west of the Florida Turnpike and Pike Road. Duke Realty s Turnpike Crossings project located in West Palm Beach, once completed will total 00,000 sq. ft. of industrial product. Site work and clearing is currently underway for buildings 1 &, which will add over 5,000 sq. ft. to Palm Beach County s industrial inventory in early 01. Liberty Airport Center, a 70-acre site located in West Palm Beach, has a site plan approved for the construction of seven warehouse/distribution buildings totaling over 0,000 sq. ft. McCraney Property Company s Turnpike Business Center, a 7-acre site, located east of the Florida Turnpike Figure 5: Palm Beach County - Jobs by Sector Other Services % Financial Activities 7% Manufacturing Construction 3% 5% Information % Trade, Transportation, and Utilities 0% The limited supply of Class A product has put upward pressure on lease rates and boosted prices for properties that are on sale. Both of these drivers aid developers to commence new construction to meet the growing demand. New development activity began in the northern part of the county, which includes FedEx Ground s 50,000 sq. ft. facility on a -acre site Total Government % Leisure and Hospitality 1% Education and Health Services 17% Source: Bureau of Labor Statistics, September 015. Professional and Business Services 0% Q3 015 CBRE Research 015 CBRE, Inc. 3

4 PALM BEACH COUNTY INDUSTRIAL on Belvedere Road, plans to develop 3,000 sq. ft. of warehouse/distribution space with to 30 clear height. United Technologies Corporation plans to develop a 30,000 sq. ft. facility, located across from Scripps on the Briger property near I- 95 and Donald Ross Road in Palm Beach Gardens. Figure : Average Direct Asking Lease Rate (NNN) Asking Lease Rate ($) Overall Whs/Dist R&D / Flex ECONOMIC INFLUENCE Palm Beach County s unemployment rate is 5.5%, a 0 bps decrease from the August 01 rate of.5%, according to the Bureau of Labor Statistics. The state s non-seasonally adjusted unemployment rate for August 015 was 5.% and the national rate was 5.%. Overall, Palm Beach County added 1,00 new jobs since August 01. In August 015, Palm Beach County experienced significant year-over-year employment growth in the following industries: trade, transportation, and utilities added 700 jobs; wholesale trade and construction added 1,000 jobs. SALES ACTIVITY Fifteen sales closed during Q3 015, totaling 9,33 sq. ft. with a dollar volume of $31 million. The average price per sq. ft. was $7. Low interest rates spurred owner/users to purchase their own buildings, which increased the value of properties to what it would cost to build. Q 0 Q 011 Q 0 Q 013 Q 01 Q3 015 Figure 7: Net Absorption (000 s of SF) 1,00 1, YTD Figure : Under Construction and Completions (000 s of SF) OUTLOOK While the market continues to tighten and business confidence grows, the Palm Beach industrial market will continue to exhibit strength into 01. Demand for warehouse/distribution space is rising in anticipation of the residential projects commencing in Palm Beach County, which will spur the need for building materials, air conditioning units, flooring, plumbing and electrical supplies. 1, Under Construction Completed YTD Q3 015 CBRE Research 015 CBRE, Inc.

5 PALM BEACH COUNTY INDUSTRIAL CONTACTS Endria Maiorano South Florida Team Lead endria.maiorano@cbre.com Patricia A. Nooney Senior Managing Director patricia.nooney@cbre.com Quinn Eddins Director, Research and Analysis quinn.eddins@cbre.com CBRE Boca Raton 50 Town Center Circle Tower II, Suite 00 Boca Raton, FL 33 Market Coverage: Includes all competitive industrial buildings,000 sq. ft. and greater in size in Palm Beach County. To learn more about CBRE Research, or to access additional research reports, please visit the Global Research Gateway at Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be 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 confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.