INDUSTRIAL MARKET REPORT. Dallas-Fort Worth. 1st Quarter Q1 Market Trends 2016 by Xceligent, Inc. All Rights Reserved

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1 INDUSTRIAL MARKET REPORT Dallas-Fort Worth 1st Quarter 2016

2 Table of Contents/ Methodology of Tracked Set Xceligent is a leading provider of verified commercial real estate information which assists real estate professionals, appraisers, owners, investors and developers that make strategic decisions to lease, sell, buy and develop commercial properties. Table of Contents and Methodology/Map 2-3 Market Overview 4-5 Statistics by Market 6 Vacancy Rates & Asking Rates 7-8 Leasing & Absorption 9 New Construction 10 Industrial Advisory Board Members 11 Xceligent Team 12 The Dallas-Fort Worth tracked set consists of an inventory of buildings considered to be competitive by the brokerage community. All buildings within the competitive tracked set have been reviewed and verified by members of the Advisory Boards for the market area. Tracked Inventory (Industrial) The total square feet of all single and multi-tenant buildings greater than 20,000 sf, including owner occupied facilities. Large manufacturing facilities, data centers, airplane hangar space, truck terminals/courts and obsolete/remediation properties are excluded. Available SF All of the available leasable space within a building, whether it is occupied or vacant, for direct lease or sublease space. Space can be available but not vacant, for example, if the landlord, or his agent, is marketing space that will be coming available at a future date because a tenant is planning to move. Vacant SF The total of the direct vacant square footage in a building that is being marketed. Net Absorption Note The net change in occupied square feet from quarter to quarter, expressed in square feet. This report reflects Direct Vacancy and Absorption, Sublease space is excluded 2

3 Industrial Market Map 3

4 Dallas-Fort Worth Industrial Overview Overview The Dallas/Fort Worth Industrial market ended the first quarter of 2016 with a vacancy rate of 7.4%. The vacancy rate continues to drop every quarter and net absorption totaled over 4 million square feet in first quarter of The bulk of the absorption for the Dallas/Fort Worth Industrial market was in South Dallas which had just over 1 million square feet of net absorption. The Dallas/Fort Worth Industrial market has minimal space on the market, while clients are readily available and as a result this has driven rates up. The Industrial Market continues to grow and stay competitive with just over 14 million square feet of space under construction. Inventory (SF) Total Available (SF) Total Vacant (SF) Total Vacancy Rate (%) Total Quarterly Net Absorption (SF) YTD Total Net Absorption (SF) 87,343,598 11,677,014 8,789, % 661, , ,923,721 34,089,002 25,282, % 1,366,487 1,366, ,488,548 15,196,977 10,916, % 2,065,787 2,065, ,755,867 60,962,993 44,988, % 4,093,318 4,093,318 Inventory (SF) Sum of Direct Available SF Direct Vacant (SF) Direct Vacancy Rate (%) Direct Quarterly Net Absorption (SF) YTD Direct Net Absorption (SF) 87,343,598 11,032,905 8,592, % 685, , ,923,721 33,032,410 25,031, % 1,372,185 1,372, ,488,548 13,418,198 10,852, % 2,065,787 2,065, ,755,867 57,483,513 44,476, % 4,123,482 4,123,482 Inventory (SF) Available Sublease (SF) Sublease Vacant (SF) Sublease Vacancy Rate (%) Sublease Quarterly Absorption (SF) YTD Sublease Net Absoprtion (SF) 87,343, , , % (24,466) (24,466) 353,923,721 1,056, , % (5,698) (5,698) 165,488,548 1,778,779 63, % ,755,867 3,479, , % (30,164) (30,164) 4

5 Dallas-Fort Worth Industrial Overview Historical Vacancy Rate & Net Absorption 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000, Q Q Q Q Q1 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 14.0% 13.0% 12.0% 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% Historical Vacancy Rates by Use 2015 Q Q Q Q Q1 Flex/R&D Warehouse - Distribution Bulk Warehouse 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - (1,000,000) Historical Net Absorption by Use 2015 Q Q Q Q Q1 Flex/R&D Warehouse - Distribution Bulk Warehouse 5

6 Statistics by Market Sublease Vacant Vacancy Rate # of Bldgs Inventory (SF) Total Vacant (SF) (SF) (%) Total Quarterly Absorption (SF) YTD Total Net Absorption (SF) South Dallas ,056,951 5,458, % 1,020,203 1,020,203 Flex/R&D 46 2,405, , % -29,567-29,567 Warehouse - Distribution ,054,450 3,326, % 226, ,947 Bulk Warehouse 59 21,596,864 1,908, % 822, ,823 Great Southwest 1, ,302,402 8,482, , % 469, ,664 Flex/R&D 184 8,318, ,464 30, % -114, ,789 Warehouse - Distribution 1,064 82,300,323 6,664,973 84, % 813, ,853 Bulk Warehouse 80 27,683, ,582 63, % -229, ,400 South Fort Worth ,625, , % 62,804 62,804 Flex/R&D 54 2,330, , % 66,504 66,504 Warehouse - Distribution ,090, , % -3,700-3,700 Bulk Warehouse 4 1,204, % - - East Dallas ,277,307 4,765, % 302, ,654 Flex/R&D 158 7,353, , % 66,133 66,133 Warehouse - Distribution ,862,259 3,510, % 297, ,456 Bulk Warehouse 33 11,061, , % -60,935-60,935 Lonestar Turnpike ,994, , % 759, ,493 Flex/R&D 17 1,203, , % 10,000 10,000 Warehouse - Distribution 139 8,995, , % 75,493 75,493 Bulk Warehouse 29 10,795, , % 674, ,000 West Fort Worth 84 4,291, , % -43,044-43,044 Flex/R&D 3 190, % - - Warehouse - Distribution 81 4,101, , % -43,044-43,044 North Fort Worth ,566,800 7,871,736 41, % 456, ,382 Flex/R&D 50 5,570,794 1,366,957 33, % - - Warehouse - Distribution ,919,751 2,878,314 8, % -82,815-82,815 Bulk Warehouse 87 32,076,255 3,626, % 539, ,197 South Stemmons 1,232 64,351,694 2,587, % -97,552-97,552 Flex/R&D 198 8,922, , % 67,321 67,321 Warehouse - Distribution 1,004 48,218,413 1,712, % -137, ,731 Bulk Warehouse 30 7,210, , % -27,142-27,142 DFW Airport ,143,522 5,975,109 21, % 7,243 7,243 Flex/R&D ,264, , % 103, ,235 Warehouse - Distribution ,554,191 3,295,095 21, % -69,396-69,396 Bulk Warehouse 78 25,324,797 1,795, % -26,596-26,596 North Stemmons ,112,045 3,255, , % 789, ,704 Flex/R&D ,937,621 1,305,714 33, % 352, ,271 Warehouse - Distribution ,720,455 1,660, , % 63,593 63,593 Bulk Warehouse 45 11,453, , % 373, ,840 Northeast Dallas ,641,515 2,880, , % 323, ,056 Flex/R&D ,422,303 2,029, , % 61,627 61,627 Warehouse - Distribution ,330, , % 261, ,429 Bulk Warehouse 14 3,888, , % - - Denton/Lewisville ,392,165 2,095, % 42,711 42,711 Flex/R&D 71 4,424, , % 78,309 78,309 Warehouse - Distribution ,775, , % -35,598-35,598 Bulk Warehouse 33 13,192,299 1,094, % - - Grand Total 6, ,755,867 44,988, , % 4,093,318 4,093,318 6

7 Vacancy Rates & Asking Rates Vacancy Rate % Average Weighted Direct Asking Rate 2015 Q Q Q Q Q Q Q Q Q Q1 South Dallas 10.3% 8.3% 8.3% 9.5% 10.3% $3.50 $3.35 $3.34 $3.34 $3.35 Great Southwest 7.7% 7.7% 7.8% 6.8% 7.2% $4.28 $3.96 $4.02 $4.08 $4.27 South Fort Worth 4.5% 4.2% 4.0% 3.9% 3.6% $3.38 $3.40 $3.35 $3.38 $3.72 East Dallas 7.0% 8.1% 9.0% 7.3% 6.9% $3.99 $4.11 $3.88 $3.72 $3.73 Lonestar Turnpike 7.1% 6.7% 5.6% 5.2% 2.8% $3.44 $3.39 $3.25 $3.30 $3.30 North Fort Worth 11.3% 11.7% 12.9% 11.9% 12.4% $3.78 $3.77 $4.96 $5.03 $5.08 South Stemmons 4.9% 4.1% 3.8% 3.9% 4.0% $5.44 $5.21 $5.53 $6.08 $5.76 DFW Airport 9.8% 10.3% 9.4% 9.7% 10.3% $6.88 $6.32 $6.20 $6.03 $5.99 North Stemmons 7.0% 6.1% 6.4% 6.2% 5.3% $4.77 $4.95 $4.92 $5.17 $5.24 Northeast Dallas 8.4% 8.1% 7.7% 7.7% 7.3% $7.19 $6.98 $9.51 $9.66 $9.57 Denton/Lewisville 9.9% 9.9% 8.9% 7.1% 7.1% $5.80 $5.72 $5.57 $6.27 $6.17 Grand Total 8.1% 7.9% 7.9% 7.4% 7.4% $4.80 $4.65 $4.92 $5.03 $5.27 7

8 Vacancy Rates & Asking Rates Vacancy Rate by Market 10.3% 12.4% 10.3% 7.2% 3.6% 6.9% 2.8% 3.2% 4.0% 5.3% 7.3% 7.1% Average Weighted Asking Rates by Market $10.07 $3.40 $4.51 $3.72 $3.72 $2.99 $5.57 $5.73 $5.95 $5.27 $7.01 $18.00 $16.00 $14.00 $12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $- Asking Lease Rate Range by Type (NNN) $15.50 $12.00 $8.52 $7.70 $4.18 $4.36 $2.91 $2.25 $2.65 Flex/R&D Warehouse - Distribution Bulk Warehouse 8

9 Leasing & Absorption Largest Lease Transactions Property Name Mountain Creek Bldg 1 - Crow Holdings SF Occupied or Vacated Tenant Name Market Specific Use 630,000 Niagra Bottling Great Southwest Warehouse - Distribution Turnpike Distribution Center ,000 OHL Lonestar Turnpike Bulk Warehouse Northport 35 Business Center Bldg A 309,357 Westco Aircraft Parts North Fort Worth Bulk Warehouse Trammell 35-Eagle Bldg D 391,389 Exel North Fort Worth Bulk Warehouse Point West Industrial VI 263,625 Quaker Sales and Distribution Company DFW Airport Bulk Warehouse Texas Crossing 226,224 Smith System Manufacturing Co Northeast Dallas Warehouse - Distribution Sales Property Name Approximate Sale Price SF Sold Buyer Seller Market Specific Use Lakeview Center II $23,535, ,000 TCRG Opportunity II LLC Coppell Associates DFW Airport Flex/ R&D 401 NE 38th St, Fort Worth 4630 Alpha Rd, Farmers Branch 5535 Airport Fw $1,687,500 25,460 $4,187, ,000 KW Martin Lumber Co BH Holt 38 LLC North Fort Worth $2,750,000 38,810 E3 MGMT LLC Stone Done Real Estate LLC North Stemmons Qualbe Marketing Group Richard D Knowles & RDK LLC Family Limited Great Southwest Warehouse - Distribution Warehouse - Distribution Warehouse - Distribution 9

10 New Construction Current New Construction by Submarket 7,000,000 6,000,000 5,776,646 5,000,000 4,000,000 3,628,398 3,000,000 2,000,000 1,670,673 1,000, ,763 1,099,873 1,065, ,622 42,000 10

11 Industrial Advisory Board Members Dallas Fort Worth CBRE Steve Berger CBRE Bob Scully Steve Trese John Brewer David Easterling Bradford Nick Talley Colliers Allen Gump Michael Spain Matt Thompson Jim Ferris Duke Realty Randy Wood Cushman & Wakefield Blake Anderson Holt Lunsford Josh Barnes E Smith Realty Partners Jim Hazard Lee & Associates George Tanghongs Holt Lunsford Canon Shoults Nathan Denton Matt Carthey Brett Lewis Donnie Rohde Lincoln Property Michael Peinado Lee & Associates Mark Graybill Mark V Mike McCartan Jones Lang LaSalle Jamie Galati NAI Robert Lynn Rick Medinis George Curry David Peterson NAI Roberty Lynn Michael Stanzel Craig Jones Patrick Embry Robert Blankenship Prologis Mitch Pruitt John Leinbaugh Stream Cannon Green Prologis Mitch Pruitt Transwestern Jeff Givens Cody Riles Stream Blake Kendrick Research Seth Koschack CBRE CBRE Research Hanes Chatham Jones Lang LaSalle Steve Triolet Jason Moser Walter Bialas Ryan Boozer Colliers Mike Otillio Transwestern John Fulton Swearingen Greg Bennett Brett Owens Henry S Miller Doug Prude Maverick Brad Lipton PM Realty Group Ariel Guerrero Mercer Jeremy Mercer Cushman & Wakefield Ryan Tharp Avison Young Matt Middendorf Jim Lake Company Conner Ivy Hudson Peters Michelle Hudson Younger Partners Carter Crow Whitehall Roy Greenberg Jessica Reinhardt 11

12 Xceligent Dallas-Fort Worth Team This information has been obtained from sources believed 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 independently confirm its accuracy. For more information, please contact : Tonalea Rehmer Dirctor of Analytics (816) trehmer@xceligent.com Chris Summers VP of Sales (214) csummers@xceligent.com Kyle Brookmole Director of Client Services (214) kbrookmole@xceligent.com Tim Cover Director of Client Services (214) tcover@xceligent.com Devin Polley Director of Client Services (214) dpolley@xceligent.com Jonathan Dudley Director of Client Services (626) jdudley@xceligent.com Brenda Schzerba Director of Client Services (972) bsczerba@xceligent.com Nicole McCarty Director of Client Services (248) nmccarty@xceligent.com 12