2013 1Q Industrial Snapshot - Cassidy Turley

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					                                                                                        Industrial Market Snapshot
                                                                                                                    St. Louis, Missouri • First Quarter • 2013

                                                                            Market Tracker                Vacancy      Net Absorption       Deliveries          Effective Rent
                                                                            *Arrows = Current Qtr Trend   8.4%         474,328 SF           457,177 SF          $4.03 NNN

                                                                            Industrial Market Continues to Show Strength
                                                                            The St. Louis industrial market posted another strong quarter with 474,000 square feet of
                                                                            positive absorption. This marks the third quarter of positive absorption in excess of 400,000
                                                                            square feet and has brought the vacancy rate down by another tenth of a point to 8.4%.

                                                                            The growth in the industrial market continues to be widespread. As was true for the entire
                                                                            2012 year, Service Centers was the only building type to experience meaningful occupancy
                                                                            losses in the first quarter of 2013. Overall, the sector lost 67,000 square feet of occupied
                                                                            space. The manufacturing sector remained in neutral for the quarter while bulk warehouse
ST. LOUIS INDUSTRIAL                                                        and office/warehouse space continued to see steady growth. The office/warehouse sector,
Economic Indicators                                                         which generally consists of smaller buildings with lower ceiling heights, saw the biggest
                                                                            growth during the year. The smaller tenants that typically occupy this type of space brought a
                                                       Q1 12       Q1 13    total of 368,000 square feet of growth to the region during the first quarter.
            St. Louis                                                       Geographically, occupancy growth was realized in every market except for the City and
                                                       1279.6      1286.5
                                                                            Mid-County which realized a combined loss of 144,000 square feet. The most significant
            St. Louis                                                       tenant loss in these two markets was Monsanto which vacated 165,000 square feet of space
                                                       8.70%       8.10%
                                                                            on Warson Rd. The Mid-County market lost another tenant when Fresh Warehousing
            U.S. CCI                                    67.53      62.05    relocated to the Fenton submarket, vacating 64,000 square feet of space on Kingsland
            U.S. Unemployment                          8.30%       7.80%
                                                                            North County and West County saw the most significant occupancy growth during the
                                                                            quarter. Lyon’s Blow Molding was the largest expansion in these two markets, entering into a
                                                                            110,000 square foot traditional bulk building on Seeger Industrial Drive in the Hazelwood
    Net Absorption                                                          submarket. This growth was partially offset by Fed-Ex’s 48,000 square foot vacancy but
                                                                            overall the market was able to record over 220,000 square feet of growth for the quarter. The
                          1                                                 growth experienced in West County was primarily the result of a large number of smaller
                         .5                                                 office/warehouse users entering into the market. In the South County market, Fenton
Square Feet (Millions)

                                                                            Properties II brought 42,000 square feet of growth after occupying its newly acquired
                                                                            building at 1587 Larkin Williams Drive.

                         -1                                                 Construction activity has ramped up over the last couple of quarters. After the expansion of
                                                                            the Westway I building started during the fourth quarter of 2012, another build-to-suit broke
                                                                            ground during the first quarter of 2013. At Aviator Business Park, the former site of the Ford
                               2008   2009    2010   2011   2012    2013
                                                                            manufacturing facility, a 227,500 square foot facility is being built for International Food
                                                                            Products Corp. which will consolidate its space from two existing locations. Another 30,870
                                                                            square foot facility is being built in St. Charles. The build-to-suit will house Component Bar
    Vacancy Rate                                                            Products which is expanding in the market.

                                                                            Outside of the expansions currently underway, there are other signs that suggest the
                                                                            industrial market can expect growth during the year. Manufacturing employment, which is
          9%                                                                strongly correlated to the expansion of the Industrial market, is on the rise with steady
                                                                            employment gains occurring in St. Louis during the past 10 months. The ISM index, which is
                                                                            a measure of manufacturing conditions in the United States, slowed during the second half
          7%                                                                of 2012 but has since picked up with four consecutive months of growth. All of this portends
                                                                            additional growth in the industrial markets which will drive continued improvement in
                                                                            vacancy and leasing rates through the remainder of the year.
           2008                   2009       2010    2011   2012     2013

Cassidy Turley Industrial Market Snapshot
St. Louis, Missouri • First Quarter • 2013

                                                               TOTAL                                    SUBLET                   DIRECT          VACANCY          CURRENT NET             YTD NET                       UNDER
  SUBMARKET                                                                     INVENTORY
                                                               BLDGS                                    VACANT                   VACANT            RATE           ABSORPTION            ABSORPTION                   CONSTRUCTION

  City                                                          1,575            66,508,911             188,247                 5,213,549           8.1%            (129,288)               (129,288)                                  -
  Metro East                                                     288             27,288,023                  -                  1,814,994           6.7%             34,887                      34,887                                -
  Mid-County                                                     732             24,856,752              70,756                 2,035,263           8.5%            (15,278)                 (15,278)                              479,220
  North County                                                   587             47,003,084              84,224                 5,289,606          11.4%            221,018                  221,018                               227,500
  South County                                                   559             20,419,478             168,762                 1,764,718           9.5%            125,132                  125,132                                   -
  St. Charles County                                             559             26,006,255              20,000                 1,246,666           4.9%             16,574                      16,574                            30,870
  West County                                                    600             22,727,984               9,674                 1,866,818           8.3%            221,283                  221,283                                   -
  By Property Type
  Modern Bulk                                                     86             30,685,101             117,900                 4,027,110          13.5%             25,495                      25,495                            706,720
  Traditional Bulk                                               267             34,290,162             205,925                 4,489,536          13.7%            149,846                  149,846                                   -
  Office/Warehouse                                              3,611            99,402,165             165,988                 6,367,309           6.6%            367,977                  367,977                               30,870
  Manufacturing                                                  511             55,017,999              51,850                 2,847,164           5.3%              (327)                      (327)
  Service Centers                                                319             12,780,917                  -                  1,345,201          10.5%            (67,179)                 (67,179)                                  -
  Other                                                          106              2,634,143                  -                   155,244            5.9%             (1,490)                 (1,490)
  ST. LOUIS TOTAL                                               4,900          234,810,487              541,663                 19,231,614          8.4%            474,328                 474,328                                737,590

Key Lease Transactions 1Q 13
PROPERTY                                         SF                            TENANT                        TRANSACTION TYPE                  SUBMARKET             Industrial Submarkets
                                                                                                                                                                     St. Louis, Missouri
121 Fountain Lakes Industrial Blvd.            128,740                    ALMO Distribution                             New                  St. Charles County

21-31 Commerce Dr.                             101,341                 True Manufacturing Co Inc                        New                  St. Charles County

12949-12955 Enterprise Way                     88,425                        Store Supply                               New                     Hazelwood
                                                                                                                                                                                                     70                       2

30880 San Clemente St.                         81,282                     Rexel Holdings USA                          Renewal                  Out Of State                            1

                                                                                                                                                                                                                4       170                  6         55
13145-13195 Lakefront Dr.                      44,600               Particle Dynamics International                     New                      Earth City                                               270
157-165 Compass Point Ct.                      41,780                        Smart Karton                             Renewal                St. Charles County                                  3
                                                                                                                                                                                                                                       255             64

                                                                                                                                                                                                                    7         55
126 Enterprise Dr.                             37,920                       Shaw Industries                           Renewal                St. Charles County                                           44

4331 Robards Ln.                               32,595                     Rexel Holdings USA                          Renewal                  Out Of State

Key Sales Transactions 1Q 13                                                                                                                                           1.   St. Charles County             5. St. Louis City
                                                                                                                                                                       2.   North County                   6. Metro East
                                                                                                                                                                       3.   West County                    7. South County
PROPERTY                               SF                           BUYER                                         SELLER                        SUBMARKET              4.   Mid County

1910-1920 Belt Way Dr.                70,000                 Aerial Premium Supply                               JER Partners                   University City

4101-4115 Geraldine Ave.              40,623             The Midwest's Best Produce Co.        C. Hammersmith et al, a General Partnership        City North

2647 Rock Hill Industrial             27,648                 JCW Investments, LLC                      Commerce Bank - St. Louis                Hanley Indust.

                                                                                                                                                                            Rob Reardon
                                                                                                                                                                            Director of Research
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