Boulder, CO 2nd Quarter 2015 INDUSTRIAL Market Trends COMMERCIAL REAL ESTATE INFORMATION
Table of Contents/Methodology of Tracked Set Table of Contents/Methodology of Tracked Set 2 Boulder Industrial Market Map 3 Q2 2015 Overview 4 Overview by Submarket/ Building Type 5 Lease Rates 6 Space 7 Notable Transactions 8 Vacancy & Absorption 9 Xceligent Boulder Contact 10 Boulder Industrial Advisory Board 11 The Boulder tracked set consists of an inventory of buildings considered to be competitive within the brokerage community. All buildings within the competitive tracked set have been reviewed and verified by members of the Advisory Boards for each market area. Inventory The total square feet of all existing single and multi tenant industrial properties greater than 10,000 SF. Total SF Total Vacant 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. The total of all of the vacant square footage within a building, including both direct and sublease space. Vacant SF The total of the vacant square footage in a building that is being marketed by an agent representing the landlord. Sublease SF Net Absorption Space that is offered for lease by a current tenant, or his agent, within a property. Whether the tenant is paying rent or not, the space is considered vacant only if it is unoccupied. The net change in occupancy from quarter to quarter, expressed in square feet. Geography Boulder and Broomfield Counties 2
Boulder Industrial Market Map 3
Q2 2015 Overview The Boulder metro continues to see increased activity, pushing the total vacancy rate down to 5.1% in 2Q 2015. Absorption is up, with a positive net gain of 155,560 for the quarter, as tenants in the market continue to grow and take additional space. A limited amount of investment properties remain available, pushing cap rates in the Boulder market downward. The tight market is diminishing landlord incentives, while simultaneously increasing competition for quality space between tenants. Oil & gas tenants remain cautious, leading to some softness in the eastern submarkets (Weld County) 400,000 300,000 200,000 100,000 0 (100,000) Vacancy & Net Absorption Q2 Q3 Q4 2015 Q1 2015 Q2 Q2 2015 Market Overview by Building Type 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% # of Bldgs Inventory Total Total Total Vacant Vacancy Rate (%) Vacant Vacancy Rate (%) Sublease Quarterly Net Absorption YTD Net Absorption Light Industrial 291 8,625,757 418,066 325,487 3.8% 418,066 325,487 3.8% 0-1,777-61,512 Manufacturing 10 526,357 0 0 0.0% 0 0 0.0% 0 6,631 6,631 Flex/R&D 361 20,682,296 1,945,177 1,277,383 6.2% 1,885,892 1,249,272 6.0% 59,285 99,885 167,040 Warehouse - 41 2,280,785 200,749 22,946 1.0% 170,023 22,946 1.0% 30,726 50,911 16,281 Grand Total 703 32,115,195 2,563,992 1,625,816 5.1% 2,473,981 1,597,705 5.0% 90,011 155,650 128,440 4
Overview by Submarket/ Building Type # of Bldgs Inventory Total Total Vacant Total Vacancy Rate (%) Vacant Vacancy Rate (%) Sublease Quarterly Net Absorption YTD Net Absorption Boulder 299 15,147,535 648,374 309,727 2.0% 620,263 281,616 1.9% 28,111 12,720-1,239 Light Industrial 91 1,991,839 66,282 36,830 1.8% 66,282 36,830 1.8% 0-14,827-20,076 Manufacturing 3 300,096 0 0 0.0% 0 0 0.0% 0 0 0 Flex/R&D 184 11,702,775 480,889 249,951 2.1% 452,778 221,840 1.9% 28,111 27,876 5,456 Warehouse - 21 1,152,825 101,203 22,946 2.0% 101,203 22,946 2.0% 0-329 13,381 Longmont 159 7,686,092 1,174,896 1,012,085 13.2% 1,153,821 1,012,085 13.2% 21,075 25,139 2,263 Light Industrial 101 3,374,864 292,861 261,734 7.8% 292,861 261,734 7.8% 0 11,800-41,436 Manufacturing 2 119,160 0 0 0.0% 0 0 0.0% 0 6,631 6,631 Flex/R&D 52 3,825,916 882,035 750,351 19.6% 860,960 750,351 19.6% 21,075 6,708 37,068 Warehouse - 4 366,152 0 0 0.0% 0 0 0.0% 0 0 0 Northwest 244 9,271,476 740,722 304,004 3.3% 699,897 304,004 3.3% 40,825 116,541 127,416 Light Industrial 98 3,248,962 58,923 26,923 0.8% 58,923 26,923 0.8% 0 0 0 Manufacturing 5 107,101 0 0 0.0% 0 0 0.0% 0 0 0 Flex/R&D 125 5,153,605 582,253 277,081 5.4% 572,154 277,081 5.4% 10,099 65,301 124,516 Warehouse - 16 761,808 99,546 0 0.0% 68,820 0 0.0% 30,726 51,240 2,900 West 1 10,092 0 0 0.0% 0 0 0.0% 0 1,250 0 Light Industrial 1 10,092 0 0 0.0% 0 0 0.0% 0 1,250 0 Manufacturing 0 0 0 0 0.0% 0 0 0.0% 0 0 0 Flex/R&D 0 0 0 0 0.0% 0 0 0.0% 0 0 0 Warehouse - 0 0 0 0 0.0% 0 0 0.0% 0 0 0 Grand Total 703 32,115,195 2,563,992 1,625,816 5.1% 2,473,981 1,597,705 5.0% 90,011 155,650 128,440 5
Asking Lease Rate (NNN) Lease Rates Min of Lease Rate Low Max of Rate High Lease Average of Average Lease Rate Light Industrial $4.00 $14.00 $8.64 Flex/R&D $4.00 $16.00 $10.41 Warehouse - $4.85 $18.50 $10.71 Asking Lease Rate Range by Type (NNN) $20.00 $18.00 $18.50 $16.00 $16.00 $14.00 $14.00 $12.00 $10.00 $10.41 $10.71 $8.00 $8.64 $6.00 $4.00 $4.00 $4.00 $4.85 $2.00 $0.00 Light Industrial Flex/R&D Warehouse - 6
Space Largest Blocks of Space 30 25 20 15 10 5 0 Boulder Longmont Northwest West 100K+ 50-100K 25-50K Historical Blocks of Space Quarter 100K+ 50-100K 25-50K Q2 4 2 5 Q3 4 2 6 Q4 2 3 4 2015 Q1 2 3 7 2015 Q2 6 50 69 7
Notable Transactions Key Lease Transactions Property Name SF Leased Company Name Market Type Colorado Technology Center 51,974 Graphic Packaging International Northwest Flex/R&D 400 Burbank St 51,200 The Allen Company Northwest Warehouse/ Dist. 6175 Longbow Dr 13,500 Nitelze Boulder Flex/R&D Key Sale Transactions Property Name SF Sold Company Name Market Type 20 Bowen St 62,000 Bowen LLC Longmont Light Industrial 1812 Boxelder St 34,329 The De Pietro Corporation Northwest Manufacturing 4765 Walnut St 30,000 1357 Walnut LLC Boulder Flex/R&D 325 Interlocken Pkwy Bldg C 21,794 The BN Investments LLC Northwest Flex/R&D 8
Vacancy Rate (%) Net Absorption Vacancy Rate (%) Net Absorption Vacancy & Absorption Vacancy Rate by Type 7.0% 6.2% 6.0% 5.0% Net Absorption by Type 120,000 99,885 100,000 80,000 4.0% 3.8% 60,000 50,911 3.0% 40,000 2.0% 1.0% 0.0% 0.0% 1.0% 20,000 0-20,000-1,777 6,631 Vacancy Rate by Quarter 10% 8.9% 9% Net Absorption by Quarter 400,000 350,000 331,894 8% 7% 6.8% 300,000 250,000 261,882 6% 5% 5.3% 5.5% 5.1% 200,000 150,000 155,650 4% 100,000 3% 50,000 2% 0 1% 0% Q2 Q3 Q4 2015 Q1 2015 Q2-50,000-100,000-49,327 Q2 Q3 Q4-67,660 2015 Q1 2015 Q2 9
Xceligent Boulder Contact 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 additional information about this report or to discuss membership in Xceligent please contact: Aaron Knight or of Client Services (303) 503-1657 aknight@xceligent.com David Verwer, CCIM Regional Vice President of Sales (480) 889-4555 dverwer@xceligent.com Eric Groth Regional Vice President of Analytics - Colorado (916) 494 1386 egroth@xceligent.com COMMERCIAL REAL ESTATE INFORMATION 10
Boulder Advisory Board Special thanks to the members of The Xceligent Boulder Advisory Board Chris Boston Gibbons White Keith Kanemoto Re/Max Traditions Commercial Division Aaron Evans New Option Partners Todd Walsh, CCIM The Colorado Group, Inc. Hunter Barto Dean Callahan & Co., Inc. 11