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					Industrial Trends Report - Fourth Quarter 2012
Southwest Riverside County, CA
                                                                                                                      COMMERCIAL REAL ESTATE


                                                  Industrial Market Snapshot
                                                  Leasing
    Contents
                                                  The Southwest Riverside County industrial market enjoyed favorable market conditions
    Executive Summary . . . . . . . . . . 1       in the fourth quarter 2012. The vacancy rate went from 7.0% in the previous quarter to
                                                  7.9% in the current quarter and, while this is an increase quarter over quarter, the overall
    Market Assessment . . . . . . . . . . 2       rate is still more than 1% lower than it was from the beginning of the recession through
                                                  the second quarter of last year. Net absorption was positive 298,159 square feet for the
                                                  quarter (and 767,032 square foot overall for 2012). Vacant sublease space increased by
    Projects of the Quarter . . . . . . . . 3
                                                  2,454 square feet. Quoted rental rates increased from third quarter 2012 levels, ending
                                                  at $0.33 per square foot. One industrial building with 698,274 square feet of industrial
    Market Snapshot . . . . . . . . . . . . 4     space was delivered to the market in the quarter, with 1,070,526 square feet still under
                                                  construction at the end of the quarter.

                                                  Temecula and Murrieta remain the centers of industrial activity due to their low lease
                                                  rates and ease of access to freeways and major metropolitan areas for distribution. For
                                                  tenants looking for a deal, Perris offers the highest potential with the lowest lease rates in
                                                  Southwest Riverside County ($0.27 per square foot) and over one million available square
                                                  feet (roughly 40% of the available industrial space on the market in the area). Distribution
                                                  businesses are the most active in the industrial market as confidence in the economic
                                                  recovery increases and businesses are starting to open again.

                                                  Businesses looking to purchase space to lease or as an investment are finding the
                                                  investment climate is improving. Lenders are more willing to lend to qualified buyers. The
                                                  majority of buyers still tend to be all-cash buyers and small industrial condos are selling
                                                  quickest. In fact the 1,000 square foot to 2,500 square foot range has a much lower
                                                  inventory than larger spaces for both lease and sales in the area.

                                                  Forecast

                                                  During 2013 the industrial market in Southwest Riverside is likely to continue to improve.
                                                  As available space in the most desirable areas and sizes begins to become harder to find
                                                  we can expect to see marginal increases in rental rates. Tenants interested in space in
                                                  Temecula and Murrieta will likely need to widen their search to include product in Perris
                                                  and Lake Elsinore.

Southwest Riverside County
                                                                                                                                                      12%
Industrial Market Trends
is a newsletter published quarterly by              9.87%   9.58%   9.57%                                                                             10%
                                                                            8.89%    8.82%
WestMar Commercial Real Estate.                                                              8.31%                    8.19%
                                                                                                     7.90%    7.79%              7.75%           7.87% 8%
To obtain additional copies or other                                                                                                     7.00%
WestMar Commercial Real Estate
                                                                                                                                                      6%
publications contact:
                                                                                                                                                      4%
Tina Graham
Marketing Assistant                                                                                                                                   2%
tgraham@WestMarCRE.com
                                                                                                                                                   0%
                                                     2010 1Q 2010 2Q 2010 3Q 2010 4Q 2011 1Q 2011 2Q 2011 3Q 2011 4Q 2012 1Q 2012 2Q 2012 3Q 2012 4Q
www.WestMarCRE.com
                                                                                       Industrial Direct Vacancy Rate
                                                                                               Source: CoStar

                         The above information, while not guaranteed, has been secured from sources we believe to be reliable.

        WestMar Commercial Real Estate 41623 Margarita Road, Suite 100, Temecula, CA 92591 | Ph: 951.491.6300 | Fax: 951.491.6330
Industrial Trends Report - Fourth Quarter 2012
Southwest Riverside County, CA
                                                                                                                                                                  COMMERCIAL REAL ESTATE

                                                Change from Last
                                                                                                                                Net Absorption                                              Direct Vacancy
                                 Current             Qtr.          Year        Forecast
                                                                                                          3,000
                                                                                                                                      2,777
Direct Vacancy Rate               7.6%
                                                    ↑             ↔             ↓                         2,500
                                                                                                                                                  7.5%
                                                                                                                                                                  9.7%          9.5%
                                                                                                                                                                                                8.2%       7.7%
                                                                                                                                      6.3%

                                                    ↔             ↑             ↑
           Total Net                                                                                      2,000
                                 298,159                                                                               4.9%
         Absorption
                                                                                                          1,500
                                                                                                                       1,178
        Asking Rent            $0.33 psf
                                                    ↔             ↑             ↑                         1,000                                   917
                                                                                                                                                                                                              767




                                                                                          in thousands
                                                                                                                                                                  482                            428
                                                                                                           500
Under Construction             1,070,526
                                                    ↑             ↑             ↔                            0
                                                                                                                                                                                251


                                                                                                                       2006           2007        2008            2009          2010            2011          2012

                     Market Trend Indicators                                                                  Annual Direct Net Absorption vs. Direct Vacancy Rate
             Southwest Riverside County. Source: CoStar                                                           Southwest Riverside County. Source: CoStar

                                                                                                             Mining & Logging                                                       0.2
$0.95                                                                                                               Construction                                                                              10.7

$0.85
                                                                                                                  Manufacturing                                                            2.9
                                                                                                                                                                                                 {     Industrial
                                                                                                                      Wholesale                              -4.2
                      $0.75                                                                                                                                                      {
                                                                                                                             Retail              -9.3                                  Retail
$0.75     $0.68
                                 $0.66                                                        Transp. & Wareh. & Util.                                     -5.3
$0.65                                                                                                                Information
                                                                                                                  Financial Activ.
                                                                                                                                                                         -0.1
                                                                                                                                                                                          2.5
                                                                                                                                                                                                 {     O ce
$0.55                                                                                                        Prof. & Bus. Serv.                  -9.5
                                             $0.46                                                                    Educ. Serv.                                                    1.1
$0.45
                                                                                                                                                                                 {
                                                                                                                     Health Care                  -8.8                                 Medical O ce
                                                        $0.36       $0.34
                                                                                                                                                                                 {
                                                                               $0.33                          Leisure & Hosp.                              -5.7                        Hotels
$0.35                                                                                                                Other Serv.                                         -0.4
                                                                                                                             Govt.                                                                                12.3
$0.25
          2006        2007       2008        2009       2010        2011       2012                                                     -15          -10           -5           0           5            10          15


        Total Weighted Average Monthly Asking Rent (NNN)                                                               Net Change in Jobs by Industry Sector
             Southwest Riverside County. Source: CoStar                                                                   Riverside/San Bernardino/Ontario
                                                                                                                    June 2009 (end of recession) - November 2012
                                                                                                           Source: U.S. Dept. of Labor, Bureau of Labor Statistics Labor Dept.


          San Diego            Los Angeles           Riverside          California                                    San Diego               Los Angeles                 Riverside               California

16.0%                                                                                                    8.00%
14.0%                                                                                                    6.00%
12.0%                                                                                                    4.00%
10.0%                                                                                                    2.00%

 8.0%                                                                                                    0.00%

 6.0%                                                                                                    -2.00%

 4.0%                                                                                                    -4.00%

 2.0%                                                                                                    -6.00%
                                                                                                         -8.00%
 0.0%
         2004     2005    2006     2007      2008     2009       2010   2011     2012             -10.00%
                                                                               (to Oct)                               2004       2005         2006         2007         2008        2009         2010         2011

                Unemployment Rate in Comparison                                                                     Total Employment Annual Percentage Change
        Source: U.S. Dept of Labor, Bureau of Labor Statistics                                                    Source: U.S. Dept of Labor, Bureau of Labor Statistics

                              The above information, while not guaranteed, has been secured from sources we believe to be reliable.

        WestMar Commercial Real Estate 41623 Margarita Road, Suite 100, Temecula, CA 92591 | Ph: 951.491.6300 | Fax: 951.491.6330
Industrial Trends Report - Fourth Quarter 2012
Southwest Riverside County, CA
                                                                                                                    COMMERCIAL REAL ESTATE


 PROJECTS OF THE QUARTER

CENTER COURT INDUSTRIAL                                                         ELM STREET INDUSTRIAL CONDO




43320 Business Park Drive, Temecula, CA                                        41765 Elm Street, Suites 301 & 302, Murrieta, CA
Located in Rancho California Business Park. Prime location near                FOR SALE: Industrial condo with great frontage on Elm Street
Temecula City Hall. Plentiful parking. 24’ clear height. Grade level           demised into two 1,734± square foot units. Occupy one unit
truck doors. Detailed architectural treatment. High quality interior           (2nd unit is leased). One 14’ grade level roll-up door per unit.
office improvements. On lockbox.                                               Reception, office and restroom in each unit. Seller financing
                                                                               Available. $399,000.
Listed by: Jim Nadal, CCIM, SIOR
                                                                               Listed by: Luanne Palmer and Jerry Palmer




SILVERHAWK 22                                                                   VINEYARD INDUSTRIAL PARK




39444 Sky Canyon Drive, Murrieta, CA                                           42065 Zevo Drive, Unit B-8, Temecula, CA
This 47,000 square foot industrial facility is well-located and ready          FOR SALE: 1,695± square foot flex-office condominium. Leased
for occupancy. Located in the Silverhawk Commerce Center in                    investment with 18 months left on lease and two one-year options.
the Temecula Valley, this property is conveniently located near                Features 99% HVAC, reception area, private office, two open
Winchester Road and Technology Drive; close to retail and service              office/production areas, large clean room (office production area),
amenities. Suites ranging from 8,262 to 10,931 square feet are                 sealed floors. 200 Amp / 120-208 volt/ 3-phase. End unit with
available for immediate occupancy.                                             abundant parking. 10’ x 10’ roll-up door. $230,000

Listed by: Jim Nadal, CCIM, SIOR                                               Listed by: Luanne Palmer




                        The above information, while not guaranteed, has been secured from sources we believe to be reliable.

        WestMar Commercial Real Estate 41623 Margarita Road, Suite 100, Temecula, CA 92591 | Ph: 951.491.6300 | Fax: 951.491.6330
INDUSTRIAL MARKET SNAPSHOT | SOUTHWEST RIVERSIDE COUNTY | FOURTH QUARTER 2012

                                                            VACANCY %                          NET ABSORPTION                          Under                   ASKING RENT
                                                                                                                                   Construction SF
  By Submarket               Total SF          Direct         Sublease          Total         Current             YTD                                          Total Average
  Hemet                       2,902,566         5.8%             0.0%           5.8%          (83,474)          (65,878)                      0                          -
  Lake Elsinore               3,097,034         6.9%             0.0%           6.9%           35,427            15,993                       0                      $0.49
  Menifee                        709,815        0.0%             0.0%           0.0%               0             11,305                       0                          -
  Murrieta                    5,975,008          6.1%            0.2%           6.3%          158,993           144,644                       0                      $0.48
  Perris                     12,718,667         10.3%            0.0%          10.3%          146,906           304,065                 1,070,526                    $0.27
  Romoland                      232,625         0.0%             0.0%           0.0%               0                 0                        0                          -
  San Jacinto                 1,513,576         4.7%             0.2%           4.9%            8,000            28,448                       0                      $0.60
  Temecula                   12,177,145         8.0%             0.0%           8.0%           26,351           287,750                       0                      $0.36
  Wildomar                      654,852          7.7%            0.0%           7.7%            5,956            40,768                       0                          -
  Winchester                      58,827        0.0%             0.0%           0.0%               0                 0                        0                          -
  GRAND TOTAL                40,040,115         7.9%             0.0%           7.9%           298,159          767,032                 1,070,526                    $0.33
                                                                                                                                                                   Source: CoStar

  TERMS AND DEFINITIONS
 Inventory: All Industrial building types are included        Net Absorption: The net change in occupied space               the quoted rental rate for each property.
 in both single-tenant and multi-tenant buildings,            over a given period of time. Unless otherwise noted
 including owneroccupied buildings.                           Net Absorption included direct and sublease space.             * Some of the data in this report has been gathered from
                                                                                                                             third party sources and hasn’t been independently
                                                                                                                             verified by WestMar Commercial Brokerage. WestMar
 Vacancy Rate: A measurement expressed as a                   Weighted Average Rental Rate: Rental rates that                Commercial Brokerage, Inc. makes no warranties or
 percentage of the total amount of physically vacant          are calculated by factoring in or weighting the square         representation as to the completeness or accuracy
 space divided by the total amount of existing                footage associated with each particular rental rate.           thereof.
 inventory. Under construction space generally is not         This has the effect of causing rental rates on larger
 included in vacancy calculations.                            spaces to affect the average more than that of
                                                              smaller spaces. The weighted average rental rates is
 Vacant Space: Space that is not currently occupied           calculated by taking the ration of the square footage
 by a tenant, regardless of any lease obligation that may     associated with the rental rate on each individual
 be on the space. Vacant space could be space that is         available space to the square footage associated with
 either available or not available. For example, sublease     rental rates on all available spas, multiplying the
 space that currently being paid for by a tenant but not      rental rate by that ration, and then adding together all
 occupied by that tenant would be considered vacant           the resulting numbers. Unless specifically specified
 space. Likewise space that has been leased but not           otherwise, rental rate averages include both Direct
 yet occupied because of finish work being done               and Sublet available spaces. All rental rates reported
 would also be considered vacant space.                       in the CoStar Industrial Report are calculated using


  WestMar Commercial Brokerage, Inc. PROFESSIONALS




                       MARK ESBENSEN                              FRED GRIMES                      JIM NADAL, SIOR                        SCOTT FOREST
                     CFO|Managing Director                             CEO                      Industrial/Office Division                  Retail Division
                         951.491.6300                              951.491.6300                      951.491.6300                           951.491.6300
                   mesbensen@westmarbre.com                 fgrimes@westmarbre.com             jnadal@westmarbre.com                  sforest@westmarbre.com
                        CA Lic. 00713990                         CA Lic. 01525630                  CA Lic. 01040679                       CA Lic. 01396577




                       JANET KRAMER, SCLS                       LUANNE PALMER                       JERRY PALMER                         JASON MICHAEL
                           Retail Division                        Office Division                  Investment Division                     Retail Division
                            951.491.6300                          951.491.6321                        951.491.6322                         951.491.6308
                      jkramer@westmarbre.com                lpalmer@westmarbre.com             jpalmer@westmarbre.com                jmichael@westmarbre.com
                          CA Lic. 01351570                      CA Lic. 01444893                    CA Lic. 01442207                      CA Lic. 01867288


                              The above information, while not guaranteed, has been secured from sources we believe to be reliable.

           WestMar Commercial Real Estate 41623 Margarita Road, Suite 100, Temecula, CA 92591 | Ph: 951.491.6300 | Fax: 951.491.6330

				
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