SALT LAKE CITY MARKET

Transcription

1 INDUSTRIAL SALT LAKE CITY MARKET FOURTH QUARTER 2017

2 Year-End 2017 Salt Lake City Table of Contents Table of Contents A Methodology B Terms & Definitions C Market Highlights & Overview CoStar Markets & Submarkets Inventory & Development Analysis Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance Figures at a Glance by Building Type & Market Figures at a Glance by Building Type & Submarket Historical Figures at a Glance Leasing Activity Analysis Select Top Lease Transactions Analysis of Individual CoStar Submarket Clusters Cache County Market Davis/Weber Counties Market Downtown Market Juab County Market Morgan County Market South Valley Market Summit County Market Tooele County Market Utah County Market West Outlying Salt Lk Market West Valley Market 2018 CoStar Group, Inc. CoStar Industrial Statistics A

3 Salt Lake City Year-End 2017 Methodology The CoStar Industrial Statistics 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 global database includes approximately 119 billion square feet of coverage in 5.4 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 2018 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 CoStar Industrial Statistics 2018 CoStar Group, Inc.

4 Year-End 2017 Salt Lake City 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-ofa-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 building-type 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) 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 2018 CoStar Group, Inc. CoStar Industrial Statistics C

5 Salt Lake City Year-End 2017 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. Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted 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: Buildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place. Abbreviated UC. 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. Vacant Space: 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 CoStar Industrial Statistics 2018 CoStar Group, Inc.

6 Overview Year-End 2017 Salt Lake City Salt Lake City s Decreases to 3.5% Net Absorption Positive 1,673,572 SF in the Quarter The Salt Lake City Industrial market ended the fourth quarter 2017 with a vacancy rate of 3.5%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 1,673,572 square feet in the fourth quarter. Vacant sublease space increased in the quarter, ending the quarter at 900,461 square feet. Rental rates ended the fourth quarter at $6.07, an increase over the previous quarter. A total of 11 buildings delivered to the market in the quarter totaling 1,504,484 square feet, with 4,004,580 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Salt Lake City Industrial market was positive 1,673,572 square feet in the fourth quarter That compares to positive 699,012 square feet in the third quarter 2017, positive 1,938,792 square feet in the second quarter 2017, and positive 953,708 square feet in the first quarter Tenants moving out of large blocks of space in 2017 include: Malt-o-meal LLC moving out of 404,076 square feet at 1630 S 4800 W, Fresenius Medical Care moving out of 263,20) square feet at 375 N Depot Dr, and Kenco Logistics moving out of 200,655 square feet at 842 W 200 N. Tenants moving into large blocks of space in 2017 include: Readerlink moving into 500,000 square feet at 1019 W 400 N, Veritiv Operating Company moving into 240,274 square feet at 3940 W 1820 S, and Honeyville, Inc. moving into 204,375 square feet at 1040 W 600 N. The Flex building market recorded net absorption of positive 227,625 square feet in the fourth quarter 2017, compared to negative 46,590 square feet in the third quarter 2017, positive 451 in the second quarter 2017, and negative 100,815 in the first quarter The Warehouse building market recorded net absorption of positive 1,445,947 square feet in the fourth quarter 2017 compared to positive 745,602 square feet in the third quarter 2017, positive 1,938,341 in the second quarter 2017, and positive 1,054,523 in the first quarter The Industrial vacancy rate in the Salt Lake City market area decreased to 3.5% at the end of the fourth quarter The vacancy rate was 3.6% at the end of the third quarter 2017, 3.4% at the end of the second quarter 2017, and 4.1% at the end of the first quarter Flex projects reported a vacancy rate of 4.4% at the end of the fourth quarter 2017, 5.2% at the end of the third quarter 2017, 4.9% at the end of the second quarter 2017, and 4.9% at the end of the first quarter Warehouse projects reported a vacancy rate of 3.4% at the end of the fourth quarter 2017, 3.3% at the end of third quarter 2017, 3.2% at the end of the second quarter 2017, and 4.0% at the end of the first quarter Largest Lease Signings The largest lease signings occurring in 2017 included: the 173,040-square-foot lease signed by Walker Edison Furniture Company LLC at 1420 S 4800 W in the West Valley market; the 104,736-square-foot deal signed by Litho-Flexo Grafics, Inc. at 555 W 9000 S in the South Valley market; and the 103,600- Rates by Building Type % Flex Warehouse Total Market 10% Rate 8% 6% 4% 2% 0% q q q q q q q q q 2018 CoStar Group, Inc. CoStar Industrial Statistics 1

7 Salt Lake City Year-End 2017 Overview square-foot lease signed by Quad Graphics at 1090 S 3800 W in the West Valley market. Sublease The amount of vacant sublease space in the Salt Lake City market increased to 900,461 square feet by the end of the fourth quarter 2017, from 196,561 square feet at the end of the third quarter There was 185,744 square feet vacant at the end of the second quarter 2017 and 192,174 square feet at the end of the first quarter Salt Lake City s Flex projects reported vacant sublease space of 36,266 square feet at the end of fourth quarter 2017, down from the 41,146 square feet reported at the end of the third quarter There were 35,304 square feet of sublease space vacant at the end of the second quarter 2017, and 20,258 square feet at the end of the first quarter Warehouse projects reported increased vacant sublease space from the third quarter 2017 to the fourth quarter Sublease vacancy went from 155,415 square feet to 864,195 square feet during that time. There was 150,440 square feet at the end of the second quarter 2017, and 171,916 square feet at the end of the first quarter Rental Rates The average quoted asking rental rate for available Industrial space was $6.07 per square foot per year at the end of the fourth quarter 2017 in the Salt Lake City market area. This represented a 5.7% increase in quoted rental rates from the end of the third quarter 2017, when rents were reported at $5.74 per square foot. The average quoted rate within the Flex sector was $8.72 per square foot at the end of the fourth quarter 2017, while Warehouse rates stood at $5.83. At the end of the third quarter 2017, Flex rates were $9.57 per square foot, and Warehouse rates were $5.38. Deliveries and Construction During the fourth quarter 2017, 11 buildings totaling 1,504,484 square feet were completed in the Salt Lake City market area. This compares to eight buildings totaling 1,045,357 square feet that were completed in the third quarter 2017, 10 buildings totaling 334,460 square feet completed in the second quarter 2017, and 642,019 square feet in 17 buildings completed in the first quarter There were 4,004,580 square feet of Industrial space under construction at the end of the fourth quarter Some of the notable 2017 deliveries include: 5600 W California Ave, a 901,138-square-foot facility that delivered in fourth quarter 2017 and is now 100% occupied, and 1019 W 400 N, a 500,000-square-foot building that delivered in third quarter 2017 and is now 100% occupied. The largest projects underway at the end of fourth quarter 2017 were 695 N John Glenn Rd, an 856,000-square-foot building with 100% of its space pre-leased, and 300 S 6400 W, an 840,000-square-foot facility that is 100% pre-leased. Inventory Total Industrial inventory in the Salt Lake City market area amounted to 236,009,535 square feet in 7,786 buildings as of the end of the fourth quarter The Flex sector consisted of 26,980,296 square feet in 1,281 projects. The Warehouse sector consisted of 209,029,239 square feet in 6,505 buildings. Within the Industrial market there were 654 owner-occupied buildings accounting for 35,113,873 square feet of Industrial space. Reports compiled by: James Broaddus - Portfolio Research Manager U.S. Comparison Past 10 Quarters 7.0% Salt Lake City United States 6.0% 5.0% Rate 4.0% 3.0% 2.0% 1.0% 0.0% q 2 CoStar Industrial Statistics 2018 CoStar Group, Inc.

8 Markets Year-End 2017 Salt Lake City CoStar Submarket Clusters & 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 Cache County Ind Davis/Weber Counties Ind Downtown Ind Juab County Ind Morgan County Ind South Valley Ind Summit County Ind Tooele County Ind Utah County Ind West Outlying Salt Lk Ind West Valley Ind Submarkets Cache County Ind Davis North Ind Downtown Ind Juab County Ind Morgan County Ind Draper Ind East Murray Ind Riverton Ind Sandy Ind South Valley Ind West Jordan Ind Summit County Ind Tooele County Ind Utah County Ind West Outlying Salt Lk Ind Airport Ind California Avenue Ind West Murray Ind West Valley Ind 2018 CoStar Group, Inc. CoStar Industrial Statistics 3

9 Salt Lake City Year-End 2017 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 Valley Ind 10 1,984, , % 43, ,454 West Outlying Salt Lk Ind 2 1,150, , % 120, ,239 Utah County Ind 9 479,388 50, % 25,935 53,265 South Valley Ind 3 193,838 8, % 19,400 64,613 Davis/Weber Counties Ind 2 146, , % 33,343 73,165 Cache County Ind 1 50,000 50, % 25,302 50,000 Juab County Ind % 25,717 0 Downtown Ind % 16,717 0 Morgan County Ind % 17,560 0 Summit County Ind % 15,040 0 All Other % 59,153 0 Totals 27 4,004,580 1,912, % 30, ,318 Recent Deliveries Leased & Un-Leased SF in Deliveries Since 2013 Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver 4.5 Leased Un-Leased 2,000 Preleased Un-Leased 4.0 1, ,600 Millions of SF Thousands of SF 1,400 1,200 1, q q 4 CoStar Industrial Statistics 2018 CoStar Group, Inc.

10 Inventory & development Year-End 2017 Salt Lake City Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 2.5 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 , , % $ , ,761 50,000 SF - 99,999 SF 9 618, , % $ , ,000 SF - 249,999 SF 5 836, , % $ , ,000 SF - 499,999 SF % $ 0 0 >= 500,000 SF 2 1,401,138 1,401, % $ 500, ,138 Recent Development by Tenancy Comparison Based on RBA Developed for Single & Multi-Tenant Use Based on Total RBA 2017 Deliveries Currently Under Construction By Building Type By Tenancy Type 15% 2% 11% 46% 54% 89% 85% 98% Multi Single Multi Single Flex Warehouse Multi Single 2018 CoStar Group, Inc. CoStar Industrial Statistics 5

11 Salt Lake City Year-End 2017 Inventory & development 6 CoStar Industrial Statistics 2018 CoStar Group, Inc.

12 Inventory & development Year-End 2017 Salt Lake City 2018 CoStar Group, Inc. CoStar Industrial Statistics 7

13 Salt Lake City Year-End 2017 Figures at a Glance Flex Market Statistics Year-End 2017 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Cache County Ind ,899 3,600 3, % 19, $8.67 Davis/Weber Counties Ind 199 3,823, , , % (96,545) 70,636 0 $7.37 Downtown Ind 49 1,298,045 24,864 24, % (1,168) 0 0 $8.06 Juab County Ind % $ Morgan County Ind 4 54, % $ South Valley Ind 501 9,295, , , % (126,908) 0 0 $8.35 Summit County Ind , % 13, $12.24 Tooele County Ind 3 31, % $ Utah County Ind 175 3,621, , , % 82,771 76,000 0 $9.89 West Outlying Salt Lk Ind 3 53, % $ West Valley Ind 304 8,203, , , % 189, $8.97 Totals 1,281 26,980,296 1,156,829 1,193, % 80, ,636 0 $8.72 Warehouse Market Statistics Year-End 2017 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Cache County Ind 145 3,916, , , % 17,636 12,500 50,000 $5.68 Davis/Weber Counties Ind 1,375 48,658, ,236 1,391, % 581, , ,331 $5.36 Downtown Ind 449 7,027, , , % (15,937) 0 0 $6.95 Juab County Ind 3 77,152 25,000 25, % (11,500) 0 0 $1.31 Morgan County Ind 8 156, % $ South Valley Ind 1,673 32,881, , , % 252, , ,838 $7.77 Summit County Ind ,692 35,319 35, % 21,900 30,000 0 $13.49 Tooele County Ind 78 4,760, , , % 13, $7.31 Utah County Ind 1,090 29,185, , , % 805, , ,388 $7.17 West Outlying Salt Lk Ind 53 6,720, , , % 1,613, ,138 1,150,479 $4.81 West Valley Ind 1,595 75,077,582 2,409,880 2,668, % 1,904, ,943 1,984,544 $5.29 Totals 6, ,029,239 6,144,899 7,009, % 5,184,413 3,379,684 4,004,580 $5.83 Total Industrial Market Statistics Year-End 2017 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Cache County Ind 167 4,225, , , % 37,036 12,500 50,000 $5.74 Davis/Weber Counties Ind 1,574 52,482,526 1,183,370 1,685, % 485, , ,331 $5.50 Downtown Ind 498 8,325, , , % (17,105) 0 0 $7.03 Juab County Ind 3 77,152 25,000 25, % (11,500) 0 0 $1.31 Morgan County Ind , % $ South Valley Ind 2,174 42,176, , , % 125, , ,838 $7.86 Summit County Ind ,253 35,319 35, % 35,071 30,000 0 $13.17 Tooele County Ind 81 4,791, , , % 13, $7.31 Utah County Ind 1,265 32,807,450 1,011,051 1,030, % 888,130 1,066, ,388 $7.49 West Outlying Salt Lk Ind 56 6,774, , , % 1,613, ,138 1,150,479 $4.81 West Valley Ind 1,899 83,281,556 2,838,874 3,107, % 2,094, ,943 1,984,544 $5.58 Totals 7, ,009,535 7,301,728 8,202, % 5,265,084 3,526,320 4,004,580 $ CoStar Industrial Statistics 2018 CoStar Group, Inc.

14 Figures at a Glance Year-End 2017 Salt Lake City Flex Submarket Statistics Year-End 2017 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Airport Ind 39 1,195,660 84,500 84, % 7, $11.90 Cache County Ind ,899 3,600 3, % 19, $8.67 California Avenue Ind 133 3,829, , , % 209, $8.71 Davis North Ind 199 3,823, , , % (96,545) 70,636 0 $7.37 Downtown Ind 49 1,298,045 24,864 24, % (1,168) 0 0 $8.06 Draper Ind ,825 13,458 13, % (6,658) 0 0 $12.15 East Murray Ind ,706 66,996 66, % (46,005) 0 0 $6.81 Juab County Ind % $ Morgan County Ind 4 54, % $ Riverton Ind ,821 3,700 3, % (3,700) 0 0 $ Sandy Ind 84 2,167,444 14,353 14, % (4,383) 0 0 $11.36 South Valley Ind 272 3,882,729 89, , % (56,082) 0 0 $8.07 Summit County Ind , % 13, $12.24 Tooele County Ind 3 31, % $ Utah County Ind 175 3,621, , , % 82,771 76,000 0 $9.89 West Jordan Ind 46 1,035,771 12,280 12, % (10,080) 0 0 $7.90 West Murray Ind 5 79,399 31,662 31, % (31,662) 0 0 $7.96 West Outlying Salt Lk Ind 3 53, % $ West Valley Ind 127 3,099, , , % 5, $8.40 Totals 1,281 26,980,296 1,156,829 1,193, % 80, ,636 0 $8.72 Warehouse Submarket Statistics Year-End 2017 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Airport Ind 183 8,324, , , % 28, ,227,602 $4.74 Cache County Ind 145 3,916, , , % 17,636 12,500 50,000 $5.68 California Avenue Ind ,670,710 1,157,128 1,415, % 1,031, , ,942 $5.67 Davis North Ind 1,375 48,658, ,236 1,391, % 581, , ,331 $5.36 Downtown Ind 449 7,027, , , % (15,937) 0 0 $6.95 Draper Ind 79 3,056,296 47,954 65, % 198, , ,602 $10.44 East Murray Ind 288 3,519,652 31,082 31, % 30, ,500 $7.59 Juab County Ind 3 77,152 25,000 25, % (11,500) 0 0 $1.31 Morgan County Ind 8 156, % $ Riverton Ind , % 19, ,736 $6.44 Sandy Ind 204 5,229, , , % (5,131) 0 0 $8.09 South Valley Ind ,660, , , % (94,026) 70,860 0 $7.04 Summit County Ind ,692 35,319 35, % 21,900 30,000 0 $13.49 Tooele County Ind 78 4,760, , , % 13, $7.31 Utah County Ind 1,090 29,185, , , % 805, , ,388 $7.17 West Jordan Ind 251 7,520,384 25,644 25, % 104, $6.77 West Murray Ind 80 3,177,520 9,209 9, % 26, $5.44 West Outlying Salt Lk Ind 53 6,720, , , % 1,613, ,138 1,150,479 $4.81 West Valley Ind ,905, , , % 819, ,322 0 $5.08 Totals 6, ,029,239 6,144,899 7,009, % 5,184,413 3,379,684 4,004,580 $ CoStar Group, Inc. CoStar Industrial Statistics 9

15 Salt Lake City Year-End 2017 Figures at a Glance Total Industrial Submarket Statistics Year-End 2017 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Airport Ind 222 9,519, , , % 35, ,227,602 $5.08 Cache County Ind 167 4,225, , , % 37,036 12,500 50,000 $5.74 California Avenue Ind ,500,030 1,344,637 1,612, % 1,240, , ,942 $5.94 Davis North Ind 1,574 52,482,526 1,183,370 1,685, % 485, , ,331 $5.50 Downtown Ind 498 8,325, , , % (17,105) 0 0 $7.03 Draper Ind 111 4,038,121 61,412 79, % 191, , ,602 $10.48 East Murray Ind 340 4,468,358 98,078 98, % (15,887) 0 16,500 $7.29 Juab County Ind 3 77,152 25,000 25, % (11,500) 0 0 $1.31 Morgan County Ind , % $ Riverton Ind 60 1,173,801 3,700 3, % 15, ,736 $6.44 Sandy Ind 288 7,397, , , % (9,514) 0 0 $8.48 South Valley Ind 1,078 16,543, , , % (150,108) 70,860 0 $7.29 Summit County Ind ,253 35,319 35, % 35,071 30,000 0 $13.17 Tooele County Ind 81 4,791, , , % 13, $7.31 Utah County Ind 1,265 32,807,450 1,011,051 1,030, % 888,130 1,066, ,388 $7.49 West Jordan Ind 297 8,556,155 37,924 37, % 94, $6.82 West Murray Ind 85 3,256,919 40,871 40, % (5,461) 0 0 $5.63 West Outlying Salt Lk Ind 56 6,774, , , % 1,613, ,138 1,150,479 $4.81 West Valley Ind ,004, , , % 824, ,322 0 $5.34 Totals 7, ,009,535 7,301,728 8,202, % 5,265,084 3,526,320 4,004,580 $ CoStar Industrial Statistics 2018 CoStar Group, Inc.

16 Figures at a Glance Year-End 2017 Salt Lake City 2018 CoStar Group, Inc. CoStar Industrial Statistics 11

17 Salt Lake City Year-End 2017 Leasing Activity Historical Rental Rates Based on Quoted Rental Rates $12.00 Flex Warehouse Total Market $1 Dollars/SF/Year $8.00 $6.00 $4.00 $2.00 $ q q q q q by Available Space Type by Building Type Percent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Building Type Salt Lake City United States Salt Lake City United States 11% 4% 15% 14% 85% 86% 89% 96% Direct Sublet Direct Sublet Flex Warehouse Flex Warehouse U.S. Rental Rate Comparison Based on Average Quoted Rental Rates Future Space Available Space Scheduled to be Available for Occupancy* $7.00 Salt Lake City United States $ Dollars/SF/Year $5.00 $4.00 $3.00 $2.00 $1.00 Millions $ q q q q * Includes Under Construction Space 12 CoStar Industrial Statistics 2018 CoStar Group, Inc.

18 Leasing Activity Year-End 2017 Salt Lake City Select Top Industrial Leases Based on Leased Square Footage For Deals Signed in 2017 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company S 3600 W West Valley Ind 260,575 1st N/A N/A CBRE 2 Bangerter Crossing - Bldg B California Avenue Ind 244,300 3rd N/A N/A Newmark Grubb Acres 3 Salt Lake International Center Airport Ind 237,324 4th N/A N/A CBRE 4 Price Gladiola A (Price California VI) California Avenue Ind 231,064 2nd N/A N/A Newmark Grubb Acres 5 Business Depot Ogden - Building 8D Davis North Ind 178,360 4th N/A N/A The Boyer Company 6 Centennial Park Cross Dock California Avenue Ind 177,818 4th N/A N/A CBRE 7 Landmark 2 California Avenue Ind 173,040 3rd Walker Edison Furniture Company LLC crc Nationwide Cushman & Wakeeld Commerce Center - Bldg 7 West Valley Ind 141,968 2nd N/A N/A CBRE 9 EDS Building West Valley Ind 139,807 3rd N/A N/A Newmark Grubb Acres 10 Utah Industrail Depot - Building 619 Tooele County Ind 131,975 4th N/A N/A Peterson Industrial Depot 11 ARA Industrial Park - Building B West Valley Ind 124,832 2nd N/A N/A Freeport West 12 Banta Building Utah County Ind 110,780 4th N/A N/A Coldwell Banker Commercial Advisors W 9000 S Sandy Ind 104,736 3rd Litho-Flexo Gracs, Inc. crc Nationwide crc Nationwide 14 Crossroads Corporate Center - Building 3 California Avenue Ind 103,600 1st Quad Graphics N/A CBRE 15 White Mountain Business District - Bldg 4/D Draper Ind 101,759 2nd My Natural Market N/A N/A 16 Pioneer Industrial Park - AMEC California Avenue Ind 88,000 1st Capital Freight N/A Newmark Grubb Acres 17 IDI Building VI California Avenue Ind 83,107 4th N/A N/A CBRE 18 Landmark 1 California Avenue Ind 72,900 1st N/A N/A Freeport West S Sandy Pky Sandy Ind 68,550 1st Apollo N/A Newmark Grubb Acres 20 Pinnacle at East Lake Geneva Utah County Ind 63,000 4th N/A N/A Keller Williams Westeld Real Esta E 1750 N Utah County Ind 61,074 4th N/A N/A Keller Williams Westeld Real Esta 22 North Pointe Business Park - Bldg 2 Utah County Ind 58,146 2nd Seagull Book Coldwell Banker Commercial Advisors Coldwell Banker Commercial Advisors 23 Business Depot Ogden - Bldg 1015 Davis North Ind 54,600 4th N/A N/A The Boyer Company 24 Majestic Airport Center #4 California Avenue Ind 48,000 2nd N/A N/A Newmark Grubb Acres; Mark Pole S 900 W West Valley Ind 47,833 3rd N/A N/A CBRE 26 Ninigret VIII California Avenue Ind 46,577 1st N/A N/A Freeport West 27 Linford Glass Building 1 California Avenue Ind 46,000 1st Jorgensen Company N/A CBRE 28 Peterson Industrial Depot - Building 657 Tooele County Ind 44,815 3rd Peterson Industrial Depot N/A Peterson Industrial Depot 29 Ogden Business Depot - Bldg 9A Davis North Ind 44,800 4th N/A N/A Berkshire Hathaway HomeServices Uta 30 Business Depot Ogden - Bldg 11A Davis North Ind 44,590 4th N/A N/A The Boyer Company 31 Business Depot Ogden - Building 8D Davis North Ind 44,590 4th N/A N/A The Boyer Company 32 Business Depot Ogden - Bldg 11A Davis North Ind 44,590 4th N/A N/A The Boyer Company 33 Business Depot Ogden - Building 15A Davis North Ind 44,590 4th N/A N/A The Boyer Company 34 Business Depot Ogden - Building 15A Davis North Ind 44,590 4th N/A N/A The Boyer Company 35 Business Depot Ogden - Building 13A Davis North Ind 44,590 4th N/A N/A The Boyer Company 36 BDO 12A Davis North Ind 44,590 4th N/A N/A The Boyer Company 37 Business Depot Ogden - Building 8D Davis North Ind 44,590 1st N/A N/A The Boyer Company 38 BDO 12A Davis North Ind 44,590 1st N/A N/A The Boyer Company 39 Peterson Industrial Park - Building 667 Tooele County Ind 44,559 4th N/A N/A Peterson Industrial Depot 40 Meridian Commerce Center Bldg 1 California Avenue Ind 43,812 2nd N/A N/A CBRE * Renewal 2018 CoStar Group, Inc. CoStar Industrial Statistics 13

19 Salt Lake City Year-End 2017 Deliveries, Absorption & C a c h e C o u n t y M a r k e t MARKET HIGHLIGHTS - Flex & Warehouse Delivered SF Absorption SF 14.0% (0.050) (0.100) 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Percent Vacant (0.150) q q q q q q q q q q q q q q q q 0.0% Vacant Space Quoted Rental Rates 0.35 Direct SF Sublet SF $ $ Dollars/SF/Year $5.60 $5.50 $5.40 $5.30 $5.20 $5.10 Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 167 4,225, , % 95, ,000 $ q 167 4,225, , % (101,753) 1 12, $ q 166 4,212, , % 1, ,500 $ q 166 4,212, , % 41, ,500 $ q 166 4,212, , % 80, $ q 166 4,212, , % (22,497) $ q 166 4,212, , % 47, $ q 166 4,212, , % 54, , $ q 165 4,178, , % 213, , ,000 $ q 163 4,022, , % (4,798) 1 30, ,866 $ q 162 3,991, , % 114, ,472 $ q 162 3,991, , % (48,135) ,606 $ q 162 3,991, , % (19,904) ,000 $ q 162 3,991, , % 6, , ,000 $ q 161 3,982, , % (63,500) 1 10, ,000 $ q 160 3,972, , % 85, , ,000 $ CoStar Industrial Statistics 2018 CoStar Group, Inc.

20 Deliveries, Absorption & D a v i s / W e b e r C o u n t i e s M a r k e t MARKET HIGHLIGHTS - Flex & Warehouse Year-End 2017 Salt Lake City (0.200) (0.400) Delivered SF Absorption SF 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Percent Vacant (0.600) q q q q q q q q q q q q q q q q 0.0% Vacant Space Quoted Rental Rates 2.00 Direct SF Sublet SF $ $ Dollars/SF/Year $4.00 $3.00 $ $ $ Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 1,574 52,482,526 1,685, % (366,860) 2 40, ,331 $ q 1,572 52,442,290 1,278, % 644, , ,567 $ q 1,568 51,708,748 1,188, % (21,288) 2 39, ,109 $ q 1,566 51,669,748 1,128, % 229, , ,873 $ q 1,563 51,599,402 1,287, % 287, , ,052 $ q 1,562 51,587,811 1,563, % 391, , ,643 $ q 1,559 51,436,531 1,803, % (32,252) 1 109, ,202 $ q 1,558 51,327,331 1,661, % (461,825) 1 8, ,225 $ q 1,557 51,319,171 1,191, % 600, , ,360 $ q 1,554 50,825,371 1,298, % 385, , ,000 $ q 1,550 50,508,331 1,366, % (70,042) ,840 $ q 1,550 50,508,331 1,296, % 416, ,040 $ q 1,550 50,508,331 1,713, % 151, ,640 $ q 1,549 50,495,436 1,852, % 56, ,895 $ q 1,549 50,495,436 1,908, % 202, ,895 $ q 1,549 50,495,436 2,111, % (36,280) $ CoStar Group, Inc. CoStar Industrial Statistics 15

21 Salt Lake City Year-End 2017 Deliveries, Absorption & D o w n t o w n M a r k e t MARKET HIGHLIGHTS - Flex & Warehouse (0.020) (0.040) (0.060) (0.080) (0.100) (0.120) Delivered SF Absorption SF 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% Percent Vacant (0.140) q q q q q q q q q q q q q q q q 0.0% Vacant Space Quoted Rental Rates 0.45 Direct SF Sublet SF $ $ $ Dollars/SF/Year $5.00 $4.00 $3.00 $2.00 $1.00 $ Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 498 8,325, , % 6, $ q 498 8,325, , % (26,835) $ q 499 8,327, , % 18, $ q 499 8,327, , % (15,259) $ q 499 8,327, , % (55,195) $ q 499 8,327, , % 7, $ q 499 8,327, , % 49, $ q 501 8,430, , % (120,884) $ q 501 8,430, , % 18, $ q 501 8,430, , % 12, $ q 502 8,496, , % 7, $ q 504 8,542, , % (130,616) $ q 504 8,542, , % (23,370) $ q 504 8,542, , % 34, $ q 504 8,542, , % (7,086) $ q 504 8,542, , % 38, $ CoStar Industrial Statistics 2018 CoStar Group, Inc.

22 Deliveries, Absorption & J u a b C o u n t y M a r k e t MARKET HIGHLIGHTS - Flex & Warehouse Year-End 2017 Salt Lake City (0.010) (0.020) (0.030) Delivered SF Absorption SF 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% Percent Vacant (0.040) q q q q q q q q q q q q q q q q 0.0% Vacant Space Quoted Rental Rates Direct SF Sublet SF $5.00 $4.50 $ Dollars/SF/Year $3.50 $3.00 $2.50 $2.00 $1.50 $ $0.50 $ Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 3 77,152 25, % $ q 3 77,152 25, % (11,500) $ q 3 77,152 13, % $ q 3 77,152 13, % $ q 3 77,152 13, % 21, $ q 3 77,152 34, % $ q 3 77,152 34, % $ q 3 77,152 34, % $ q 3 77,152 34, % $ q 3 77,152 34, % $ q 3 77,152 34, % (34,709) $ q 3 77, % $ q 3 77, % $ q 3 77, % $ q 3 77, % $ q 3 77, % $ CoStar Group, Inc. CoStar Industrial Statistics 17

23 Salt Lake City Year-End 2017 Deliveries, Absorption & M o r g a n C o u n t y M a r k e t MARKET HIGHLIGHTS - Flex & Warehouse 1 Delivered SF Absorption SF 0.3% 0 0.2% 0 0 (0) 0.2% 0.1% Percent Vacant (0) 0.1% (1) q q q q q q q q q q q q q q q q 0.0% Vacant Space Quoted Rental Rates Direct SF Sublet SF Dollars/SF/Year $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $ Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q , % $ q , % $ q , % $ q , % $ q , % $ q , % $ q , % $ q , % $ q , % $ q , % $ q , % $ q , % $ q , % $ q , % $ q , % (500) $ q , % $ 18 CoStar Industrial Statistics 2018 CoStar Group, Inc.

24 Deliveries, Absorption & S o u t h V a l l e y M a r k e t MARKET HIGHLIGHTS - Flex & Warehouse Year-End 2017 Salt Lake City (0.050) (0.100) Delivered SF Absorption SF 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Percent Vacant (0.150) q q q q q q q q q q q q q q q q 0.0% Vacant Space Quoted Rental Rates Direct SF Sublet SF $8.40 $ $ Dollars/SF/Year $7.80 $7.60 $7.40 $7.20 $7.00 $6.80 $6.60 Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates q 2,174 42,176, , % 99, , ,838 $ q 2,172 42,006, , % 61, ,721 $ q 2,172 42,006, , % 94, ,619 $ q 2,171 41,991, , % (129,136) 2 116, ,619 $ q 2,169 41,875, , % 286, , ,878 $ q 2,167 41,771, , % (111,524) 2 24, ,530 $ q 2,165 41,747, , % 132, ,111 $ q 2,164 41,727, , % 115, , ,111 $ q 2,162 41,602, , % 125, ,848 $ q 2,162 41,602, , % 82, , ,237 $ q 2,162 41,532, , % (109,784) 1 7, ,904 $ q 2,161 41,524, , % 140, , ,259 $ q 2,160 41,508, , % (33,342) 2 179, ,330 $ q 2,158 41,329, , % 147, ,063 $ q 2,158 41,329, , % 40, ,000 $ q 2,158 41,329, , % (10,585) $ CoStar Group, Inc. CoStar Industrial Statistics 19