The CoStar Industrial Report M I D - Y E A R 2 0 1 3
MID-YEAR 2013 COLORADO SPRINGS Table of Contents Table of Contents.................................................................... A Methodology........................................................................ B Terms & Definitions.................................................................. C Market Highlights & Overview......................................................... 1 CoStar Markets...................................................................... 3 Inventory & Development Analysis...................................................... 4 Inventory & Development Analysis Select Top Under Construction Properties Figures at a Glance................................................................... 7 Figures at a Glance by Building Type & Market Historical Figures at a Glance Leasing Activity Analysis.............................................................. 9 Select Top Lease Transactions Sales Activity Analysis............................................................... 11 Sales Activity Analysis Select Top Sales Transactions Analysis of Individual CoStar Submarket Clusters......................................... 13 CBD Market Greater CBD Market North Market Northeast Market Northwest Market Southeast Market Southwest Market Teller County Market 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT A
COLORADO SPRINGS MID-YEAR 2013 Methodology The CoStar Industrial Report 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 national database includes approximately 80.7 billion square feet of coverage in 3.5 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 1-877-7COSTAR, or visit our web site at www.costar.com Copyright 2013 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. 1331 L ST NW Washington, DC 20005 (800) 204-5960 www.costar.com NASDAQ: CSGP B THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
MID-YEAR 2013 COLORADO SPRINGS 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-of-a-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. Existing Inventory: 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 buildingtype 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) 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT C
COLORADO SPRINGS MID-YEAR 2013 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 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: The status of a building that is in the process of being developed, assembled, built or constructed. A building is considered to be under construction after it has begun construction and until it receives a certificate of occupancy. Vacancy 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 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
OVERVIEW MID-YEAR 2013 COLORADO SPRINGS Colorado Springs s Vacancy Decreases to 8.8% Net Absorption Positive 149,174 SF in the Quarter The Colorado Springs Industrial market ended the second quarter 2013 with a vacancy rate of 8.8%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 149,174 square feet in the second quarter. Vacant sublease space remained unchanged in the quarter, ending at 99,028 square feet. Rental rates ended the second quarter at $5.97, a decrease over the previous quarter. There was 158,100 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Colorado Springs Industrial market was positive 149,174 square feet in the second quarter 2013. That compares to positive 120,766 square feet in the first quarter 2013, positive 465,666 square feet in the fourth quarter, and positive 147,297 square feet in the third quarter. The Flex building market recorded net absorption of positive 66,985 square feet in the second quarter 2013, compared to positive 21,668 square feet in the first quarter 2013, positive 261,061 in the fourth quarter, and negative (18,414) in the third quarter. The Warehouse building market recorded net absorption of positive 82,189 square feet in the second quarter 2013 compared to positive 99,098 square feet in the first quarter 2013, positive 204,605 in the fourth quarter, and positive 165,711 in the third quarter. Vacancy The Industrial vacancy rate in the Colorado Springs market area decreased to 8.8% at the end of the second quarter 2013. The vacancy rate was 9.3% at the end of the first quarter 2013, 9.6% at the end of the fourth quarter, and 10.4% at the end of the third quarter. Flex projects reported a vacancy rate of 12.5% at the end of the second quarter 2013, 13.6% at the end of the first quarter 2013, 13.9% at the end of the fourth quarter, and 15.2% at the end of the third quarter. Warehouse projects reported a vacancy rate of 8.0% at the end of the second quarter 2013, 8.3% at the end of first quarter 2013, 8.6% at the end of the fourth quarter, and 9.4% at the end of the third quarter. Largest Lease Signings The largest lease signings occurring in 2013 included: the 85,319-square-foot lease signed by High Performance Engineering, Inc. at ArrowsWest Building I in the Northwest market; the 34,200-square-foot deal signed by Aeroflex Rad at 5030 Centennial Blvd in the Northwest market; and the 24,000- square-foot lease signed by K & H Manufacturing CO at Airport Business Center - Bldg A in the Southeast market. Sublease Vacancy The amount of vacant sublease space in the Colorado Springs market stayed the same at 99,028 square feet by the end of the second quarter 2013, from 99,028 square feet at the end of the first quarter 2013. There was 120,886 square feet vacant at the end of the fourth quarter and 120,886 square feet at the end of the third quarter. Colorado Springs s Flex projects reported vacant sublease space of 23,915 square feet at the end of second quarter 2013, Vacancy Rates by Building Type 2007-2013 20% Flex Warehouse Total Market 18% 16% 14% Vacancy Rate 12% 10% 8% 6% 4% 2% 0% 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2013 2013 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 1
COLORADO SPRINGS MID-YEAR 2013 OVERVIEW from the 23,915 square feet reported at the end of the first quarter 2013. There were 45,773 square feet of sublease space vacant at the end of the fourth quarter, and 45,773 square feet at the end of the third quarter. Warehouse projects reported no vacant sublease space from the first quarter 2013 to the second quarter 2013. Sublease vacancy went from 75,113 square feet to 75,113 square feet during that time. There was 75,113 square feet at the end of the fourth quarter, and 75,113 square feet at the end of the third quarter. Rental Rates The average quoted asking rental rate for available Industrial space was $5.97 per square foot per year at the end of the second quarter 2013 in the Colorado Springs market area. This represented a 3.4% decrease in quoted rental rates from the end of the first quarter 2013, when rents were reported at $6.18 per square foot. The average quoted rate within the Flex sector was $7.17 per square foot at the end of the second quarter 2013, while Warehouse rates stood at $5.74. At the end of the first quarter 2013, Flex rates were $7.23 per square foot, and Warehouse rates were $5.93. Deliveries and Construction During the second quarter 2013, no new space was completed in the Colorado Springs market area. This compares to 0 buildings totaling 0 square feet that were completed in the first quarter 2013, one building totaling 210,000 square feet completed in the fourth quarter, and 125,060 square feet in one building completed in the third quarter. There were 158,100 square feet of Industrial space under construction at the end of the second quarter 2013. The largest projects underway at the end of second quarter 2013 were 1350 Bellprat View, a 155,220-square-foot building with 100% of its space pre-leased, and 3130 N Hancock Ave, a 2,880-square-foot facility that is 39% pre-leased. U.S. Vacancy Comparison Past 8 Quarters Inventory Total Industrial inventory in the Colorado Springs market area amounted to 34,155,867 square feet in 1,859 buildings as of the end of the second quarter 2013. The Flex sector consisted of 6,335,691 square feet in 256 projects. The Warehouse sector consisted of 27,820,176 square feet in 1,603 buildings. Within the Industrial market there were 47 owner-occupied buildings accounting for 3,529,678 square feet of Industrial space. Sales Activity Tallying industrial building sales of 15,000 square feet or larger, Colorado Springs industrial sales figures fell during the first quarter 2013 in terms of dollar volume compared to the fourth quarter of. In the first quarter, four industrial transactions closed with a total volume of $8,185,000. The four buildings totaled 205,940 square feet and the average price per square foot equated to $39.74 per square foot. That compares to three transactions totaling $18,437,000 in the fourth quarter. The total square footage was 147,413 for an average price per square foot of $125.07. Total year-to-date industrial building sales activity in 2013 is up compared to the previous year. In the first three months of 2013, the market saw four industrial sales transactions with a total volume of $8,185,000. The price per square foot has averaged $39.74 this year. In the first three months of, the market posted one transaction with a total volume of $2,400,000. The price per square foot averaged $53.37. Cap rates have been lower in 2013, averaging 7.50%, compared to the first three months of last year when they averaged 9.80%. One of the largest transactions that has occurred within the last four quarters in the Colorado Springs market is the sale of Taylor Farms in Colorado Springs. This 83,616-square-foot industrial building sold for $15,200,000, or $181.78 per square foot. The property sold on 12/20/, at a 7.50% cap rate. Reports compiled by: Ethan Reed CoStar Senior Research Manager. 12.0% Colorado Springs United States 1% Vacancy Rate 8.0% 6.0% 4.0% 2.0% % 2013 2013 Source: CoStar Property 2 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
MARKETS MID-YEAR 2013 COLORADO SPRINGS CoStar 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 CBD Ind Greater CBD Ind North Ind Northeast Ind Northwest Ind Southeast Ind Southwest Ind Teller County Ind 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 3
COLORADO SPRINGS MID-YEAR 2013 INVENTORY & DEVELOPMENT Historical Deliveries 1982-2013 3.0 Deliveries Average Delivered SF 2.5 2.5 Millions of SF 2.0 1.5 1.0 0.5 1.6 1.5 1.6 1.4 1.1 1.0 0.9 0.8 0.6 0.6 0.5 0.5 0.5 0.5 0.3 0.4 0.4 0.4 0.3 0.3 0.4 0.4 0.4 0.2 0.2 0.1 0.1 0.2 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2013 * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction RBA Market Under Construction Inventory Average Bldg Size # Bldgs Total RBA Preleased SF Preleased % All Existing U/C Northeast Ind 1 155,220 155,220 10% 29,025 155,220 North Ind 1 2,880 1,123 39.0% 17,522 2,880 Teller County Ind 0 0 0 % 13,122 0 Greater CBD Ind 0 0 0 % 11,330 0 CBD Ind 0 0 0 % 12,259 0 Northwest Ind 0 0 0 % 34,995 0 Southeast Ind 0 0 0 % 15,741 0 Southwest Ind 0 0 0 % 14,418 0 Totals 2 158,100 156,343 98.9% 18,373 79,050 Recent Deliveries Leased & Un-Leased SF in Deliveries Since 2009 0.4 Leased Un-Leased 0.4 0.3 Millions of SF 0.3 0.2 0.2 0.1 0.1 2009 2010 2013 4 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
INVENTORY & DEVELOPMENT MID-YEAR 2013 COLORADO SPRINGS Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 0.3 Construction Starts Deliveries 0.2 0.2 0.2 0.2 Millions of SF 0.2 0.1 0.1 0.1 0.1 2010 2010 2010 2010 2013 2013 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 0 0 0 % $0 0 0 50,000 SF - 99,999 SF 0 0 0 % $0 0 0 100,000 SF - 249,999 SF 0 0 0 % $0 0 0 250,000 SF - 499,999 SF 0 0 0 % $0 0 0 >= 500,000 SF 0 0 0 % $0 0 0 Recent Development by Tenancy Existing Inventory Comparison Based on RBA Developed for Single & Multi-Tenant Use Based on Total RBA No 2013 Deliveries Currently Under Construction By Building Type By Tenancy Type 2% 81% 19% 50% 50% 98% Multi Single Flex Warehouse Multi Single 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 5
COLORADO SPRINGS MID-YEAR 2013 INVENTORY & DEVELOPMENT 6 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
FIGURES AT A GLANCE MID-YEAR 2013 COLORADO SPRINGS Flex Market Statistics Mid-Year 2013 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD Ind 3 42,506 0 0 % 10,000 0 0 $4.50 Greater CBD Ind 11 245,562 22,820 22,820 9.3% 3,768 0 0 $8.81 North Ind 40 621,405 40,168 40,168 6.5% (35,943) 0 0 $6.86 Northeast Ind 12 792,766 99,552 99,552 12.6% 10,597 0 0 $11.04 Northwest Ind 55 2,466,574 322,254 332,169 13.5% 103,115 0 0 $6.41 Southeast Ind 80 1,556,705 271,956 285,956 18.4% (2,461) 0 0 $6.39 Southwest Ind 51 541,785 5,720 5,720 1.1% 6,931 0 0 $7.37 Teller County Ind 4 68,388 7,354 7,354 10.8% (7,354) 0 0 $5.99 Totals 256 6,335,691 769,824 793,739 12.5% 88,653 0 0 $7.17 Warehouse Market Statistics Mid-Year 2013 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD Ind 34 411,079 62,122 62,122 15.1% 8,400 0 0 $5.77 Greater CBD Ind 126 1,306,697 61,209 61,209 4.7% 17,703 0 0 $5.95 North Ind 261 4,652,650 159,246 159,246 3.4% (19,071) 0 2,880 $5.53 Northeast Ind 89 2,138,768 21,701 21,701 1.0% (1,160) 0 155,220 $8.26 Northwest Ind 155 4,882,432 1,077,029 1,077,029 22.1% 53,334 0 0 $5.13 Southeast Ind 786 12,074,931 735,477 810,590 6.7% 117,920 0 0 $5.53 Southwest Ind 140 2,212,051 24,735 24,735 1.1% 4,161 0 0 $6.38 Teller County Ind 12 141,568 1,100 1,100 0.8% 0 0 0 $5.49 Totals 1,603 27,820,176 2,142,619 2,217,732 8.0% 181,287 0 158,100 $5.74 Total Industrial Market Statistics Mid-Year 2013 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD Ind 37 453,585 62,122 62,122 13.7% 18,400 0 0 $5.60 Greater CBD Ind 137 1,552,259 84,029 84,029 5.4% 21,471 0 0 $6.26 North Ind 301 5,274,055 199,414 199,414 3.8% (55,014) 0 2,880 $5.61 Northeast Ind 101 2,931,534 121,253 121,253 4.1% 9,437 0 155,220 $8.84 Northwest Ind 210 7,349,006 1,399,283 1,409,198 19.2% 156,449 0 0 $5.34 Southeast Ind 866 13,631,636 1,007,433 1,096,546 8.0% 115,459 0 0 $5.69 Southwest Ind 191 2,753,836 30,455 30,455 1.1% 11,092 0 0 $6.50 Teller County Ind 16 209,956 8,454 8,454 4.0% (7,354) 0 0 $5.76 Totals 1,859 34,155,867 2,912,443 3,011,471 8.8% 269,940 0 158,100 $5.97 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 7
COLORADO SPRINGS MID-YEAR 2013 FIGURES AT A GLANCE Flex Market Statistics Mid-Year 2013 Existing Inventory Vacancy Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates 2013 256 6,335,691 769,824 793,739 12.5% 66,985 0 0 0 0 $7.17 2013 256 6,335,691 836,809 860,724 13.6% 21,668 0 0 0 0 $7.23 256 6,335,691 836,619 882,392 13.9% 261,061 1 210,000 0 0 $7.18 255 6,125,691 887,680 933,453 15.2% (18,414) 0 0 1 210,000 $7.07 256 6,127,851 865,685 917,199 15.0% 982 0 0 1 210,000 $6.90 256 6,127,851 866,667 918,181 15.0% 19,254 0 0 1 210,000 $6.45 256 6,127,851 885,921 937,435 15.3% (971) 0 0 1 210,000 $6.48 256 6,127,851 898,950 936,464 15.3% 46,415 0 0 0 0 $6.64 256 6,127,851 937,519 982,879 16.0% 50,491 0 0 0 0 $6.74 256 6,127,851 990,860 1,033,370 16.9% (29,777) 0 0 0 0 $6.81 2010 256 6,127,851 961,083 1,003,593 16.4% 54,610 0 0 0 0 $6.88 2010 256 6,127,851 1,015,693 1,058,203 17.3% 53,838 0 0 0 0 $7.03 2010 256 6,127,851 1,062,159 1,112,041 18.1% 32,565 0 0 0 0 $7.07 2010 256 6,127,851 1,086,270 1,144,606 18.7% (2,594) 0 0 0 0 $7.15 2009 256 6,127,851 1,097,947 1,142,012 18.6% (121,969) 0 0 0 0 $7.31 2008 256 6,127,851 1,007,671 1,020,043 16.6% (75,499) 3 41,022 0 0 $7.83 Quoted Warehouse Market Statistics Mid-Year 2013 Existing Inventory Vacancy Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates 2013 1,603 27,820,176 2,142,619 2,217,732 8.0% 82,189 0 0 2 158,100 $5.74 2013 1,603 27,820,176 2,224,808 2,299,921 8.3% 99,098 0 0 1 155,220 $5.93 1,603 27,820,176 2,323,906 2,399,019 8.6% 204,605 0 0 1 155,220 $5.89 1,603 27,820,176 2,528,511 2,603,624 9.4% 165,711 1 125,060 0 0 $5.88 1,602 27,695,116 2,569,162 2,644,275 9.5% 70,646 0 0 1 125,060 $5.79 1,602 27,695,116 2,643,008 2,714,921 9.8% (77,603) 1 22,096 1 125,060 $5.97 1,601 27,673,020 2,490,309 2,615,222 9.5% (53,904) 0 0 1 22,096 $6.03 1,601 27,673,020 2,436,405 2,561,318 9.3% 150,138 1 24,035 1 22,096 $6.09 1,600 27,648,985 2,562,508 2,687,421 9.7% 88,725 0 0 1 24,035 $6.12 1,600 27,648,985 2,651,233 2,776,146 1% 126,476 0 0 1 24,035 $5.88 2010 1,600 27,648,985 2,776,209 2,902,622 10.5% 274,029 0 0 0 0 $5.83 2010 1,600 27,648,985 3,050,238 3,176,651 11.5% 182,142 0 0 0 0 $5.86 2010 1,600 27,648,985 3,250,002 3,358,793 12.1% 113,725 1 11,628 0 0 $5.95 2010 1,599 27,637,357 3,319,099 3,460,890 12.5% 18,990 2 14,496 1 11,628 $5.94 2009 1,597 27,622,861 3,325,809 3,465,384 12.5% (121,600) 9 103,288 3 26,124 $5.92 2008 1,588 27,519,573 3,044,546 3,240,496 11.8% (948,237) 9 107,443 6 75,380 $6.34 Quoted Total Industrial Market Statistics Mid-Year 2013 Existing Inventory Vacancy Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates 2013 1,859 34,155,867 2,912,443 3,011,471 8.8% 149,174 0 0 2 158,100 $5.97 2013 1,859 34,155,867 3,061,617 3,160,645 9.3% 120,766 0 0 1 155,220 $6.18 1,859 34,155,867 3,160,525 3,281,411 9.6% 465,666 1 210,000 1 155,220 $6.13 1,858 33,945,867 3,416,191 3,537,077 10.4% 147,297 1 125,060 1 210,000 $6.12 1,858 33,822,967 3,434,847 3,561,474 10.5% 71,628 0 0 2 335,060 $6.03 1,858 33,822,967 3,509,675 3,633,102 10.7% (58,349) 1 22,096 2 335,060 $6.07 1,857 33,800,871 3,376,230 3,552,657 10.5% (54,875) 0 0 2 232,096 $6.12 1,857 33,800,871 3,335,355 3,497,782 10.3% 196,553 1 24,035 1 22,096 $6.20 1,856 33,776,836 3,500,027 3,670,300 10.9% 139,216 0 0 1 24,035 $6.24 1,856 33,776,836 3,642,093 3,809,516 11.3% 96,699 0 0 1 24,035 $6.08 2010 1,856 33,776,836 3,737,292 3,906,215 11.6% 328,639 0 0 0 0 $6.05 2010 1,856 33,776,836 4,065,931 4,234,854 12.5% 235,980 0 0 0 0 $6.13 2010 1,856 33,776,836 4,312,161 4,470,834 13.2% 146,290 1 11,628 0 0 $6.18 2010 1,855 33,765,208 4,405,369 4,605,496 13.6% 16,396 2 14,496 1 11,628 $6.20 2009 1,853 33,750,712 4,423,756 4,607,396 13.7% (243,569) 9 103,288 3 26,124 $6.22 2008 1,844 33,647,424 4,052,217 4,260,539 12.7% (1,023,736) 12 148,465 6 75,380 $6.76 Quoted 8 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
LEASING ACTIVITY MID-YEAR 2013 COLORADO SPRINGS Historical Rental Rates Based on Quoted Rental Rates $8.00 Flex Warehouse Total Market $7.00 $6.00 Dollars/SF/Year $5.00 $4.00 $3.00 $2.00 $1.00 $0 2013 2013 Vacancy by Available Space Type Vacancy by Building Type Percent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Building Type Colorado Springs United States Colorado Springs United States 3% 3% 74% 26% 85% 15% 97% 97% 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 $6.00 Colorado Springs United States Dollars/SF/Year $5.00 $4.00 $3.00 $2.00 Millions $1.00 $0 2013 2013 2013 2013 2014 2014 2014 2014 * Includes Under Construction Space 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 9
COLORADO SPRINGS MID-YEAR 2013 LEASING ACTIVITY Select Top Industrial Leases Based on Leased Square Footage For Deals Signed in 2013 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company 1 ArrowsWest Building I Northwest Ind 85,319 2nd High Performance Engineering, Inc. Sierra Commercial Real Estate Sierra Commercial Real Estate 2 5030 Centennial Blvd Northwest Ind 34,200 2nd Aeroflex Rad Colliers International Jones Lang LaSalle Americas, Inc. 3 3286 N El Paso St North Ind 26,550 1st N/A N/A Olive Real Estate Group 4 Airport Business Center - Bldg A Southeast Ind 24,000 1st K & H Manufacturing CO N/A NAI Highland Commercial Group, LLC 5 5825 Mark Dabling Blvd Northwest Ind 21,500 1st N/A N/A Dabling Properties, LLC 6 4630 Forge Rd Northwest Ind 18,000 2nd N/A N/A Cameron Butcher Company 7 171 Talamine Ct North Ind 17,500 1st Aaa Expo & Event Services N/A Olive Real Estate Group 8 Westech I Northwest Ind 15,656 1st N/A N/A Trend Commercial Real Estate 9 1510 Quail Lake Loop* Southwest Ind 14,000 1st Quantum Clean N/A N/A 10 120 S Sahwatch St CBD Ind 13,527 1st Bargain Book Warehouse N/A N/A 11 Bullock s Express Southeast Ind 13,000 2nd Cabinets N/A Keller Williams Client s Choice Rea 12 Colorado Interstate Gas Greater CBD Ind 12,000 1st N/A N/A NAI Highland Commercial Group, LLC 13 4980 Centennial Blvd Northwest Ind 11,600 2nd N/A N/A NAI Highland Commercial Group, LLC 14 1610 W Garden of the Gods Rd Northwest Ind 11,000 1st N/A N/A NAI Highland Commercial Group, LLC 15 5695 Parachute Cir Southeast Ind 7,599 1st N/A Direct Deal Peak Commercial Properties 16 Tamarac Business Center Teller County Ind 7,588 2nd N/A N/A Peak Commercial Properties 17 Aerotech R & D Southeast Ind 6,112 1st N/A N/A Corporate Office Properties Trust, 18 845 W Moreno Ave Southwest Ind 6,000 1st N/A N/A Olive Real Estate Group 19 4295 Northpark Dr North Ind 5,900 1st Performance Sports N/A Palmer McAllister 20 3455 Fillmore Ridge Heights* Northwest Ind 5,807 1st My Digital Printer Direct Deal Direct Deal 21 Westech II Northwest Ind 5,710 2nd N/A N/A Trend Commercial Real Estate 22 3201 N El Paso St* North Ind 5,400 1st Green Acres Granite N/A NAI Highland Commercial Group, LLC 23 5070 List Dr Northwest Ind 5,126 1st N/A N/A Peak Commercial Properties 24 2502 E Bijou St Southeast Ind 5,000 1st N/A Direct Deal Plant Medicines Colo 25 1478 Woolsey Hts Southeast Ind 4,945 2nd N/A N/A RE/MAX Advantage 26 2607 Durango Dr Southeast Ind 4,800 1st Arbor Carpet Direct Deal America 2000, Inc. 27 Warehouse Ltd. XX Southeast Ind 4,800 1st Concepts in Millwork Direct Deal America 2000, Inc. 28 Tamarac Business Center Teller County Ind 4,705 2nd N/A N/A Peak Commercial Properties 29 786 Hathaway Dr Southeast Ind 4,665 2nd N/A N/A RE/MAX Advantage 30 Farmer Brothers Coffee Southwest Ind 4,511 1st N/A N/A Olive Real Estate Group 31 4630 Forge Rd Northwest Ind 4,500 2nd N/A N/A Cameron Butcher Company 32 Garden of the Gods Industrial Cntr Northwest Ind 4,400 2nd N/A N/A Trend Commercial Real Estate 33 1220 Valley St Southeast Ind 4,300 2nd N/A N/A Hoff & Leigh, Inc. 34 4825 Northpark Dr North Ind 4,275 1st N/A N/A Peak Commercial Properties 35 4735 Town Center Dr Southeast Ind 4,200 2nd Colorado Springs Crossfit Direct Deal Peak Commercial Properties 36 5050 List Dr Northwest Ind 4,113 2nd N/A N/A Dominion Property Management 37 3325 N El Paso St North Ind 4,000 1st N/A N/A Cameron Butcher Company 38 842 S Sierra Madre St Greater CBD Ind 3,768 1st N/A N/A Olive Real Estate Group 39 4747 Town Center Dr Southeast Ind 3,660 2nd Black Label Performance N/A N/A 40 4735 Town Center Dr Southeast Ind 3,600 2nd Hidden Treasures N/A Peak Commercial Properties * Renewal 10 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
SALES ACTIVITY MID-YEAR 2013 COLORADO SPRINGS The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter 12.0% Cap Rate Price/SF $140 1% $120 Cap Rate Percentage 8.0% 6.0% 4.0% $100 $80 $60 $40 Dollars/SF 2.0% $20 % 2010 2010 2010 2013 $0 Source: CoStar COMPS Sales Volume & Price Sales Analysis by Building Size Based on Industrial Building Sales of 15,000 SF and Larger Based on Industrial Bldg Sales From April - March 2013 Sales Volume Price/SF Bldg Size # RBA $ Volume Price/SF Cap Rate $20 $140 Millions of Sales Volume Dollars $18 $16 $14 $12 $10 $8 $6 $4 $2 $120 $100 $80 $60 $40 $20 Price/SF < 25,000 SF 16 212,809 $ 14,285,400 $ 67.13-25K-99K SF 8 413,321 $ 30,203,900 $ 73.08 7.50% 100K-249K SF 1 125,060 $ 8,311,000 $ 66.46 7.39% $0 2010 2010 2013 $0 >250K SF - - - $ - - Source: CoStar COMPS Source: CoStar COMPS U.S. Price/SF Comparison Based on Industrial Building Sales of 15,000 SF and Larger U.S. Cap Rate Comparison Based on Industrial Building Sales of 15,000 SF and Larger $140 Colorado Springs US 12.0% Colorado Springs US $120 1% Dollars per SF $100 $80 $60 $40 Cap Rate Percentage 8.0% 6.0% 4.0% $20 2.0% $0 2010 2010 2010 2010 2013 % 2010 2010 2010 2010 2013 Source: CoStar COMPS Source: CoStar COMPS 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 11
COLORADO SPRINGS MID-YEAR 2013 SALES ACTIVITY 12 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
C B D M A R K E T MARKET HIGHLIGHTS - FLEX & WAREHOUSE MID-YEAR 2013 COLORADO SPRINGS Deliveries, Absorption & Vacancy 20 Delivered SF Absorption SF Vacancy 25.0% 15 2% 10 05 00 15.0% 1% Percent Vacant (05) 5.0% (10) 2010 2010 2010 2010 2013 2013 % Vacant Space Quoted Rental Rates 9 Direct SF Sublet SF $5.70 8 $5.60 7 $5.50 6 5 4 3 2 Dollars/SF/Year $5.40 $5.30 $5.20 $5.10 1 $5.00 0 2013 2013 $4.90 2013 2013 Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2013 37 453,585 62,122 13.7% 2,400 0 0 0 0 $5.60 2013 37 453,585 64,522 14.2% 16,000 0 0 0 0 $5.40 37 453,585 80,522 17.8% (2,400) 0 0 0 0 $5.29 37 453,585 78,122 17.2% 6,000 0 0 0 0 $5.16 37 453,585 84,122 18.5% 950 0 0 0 0 $5.21 37 453,585 85,072 18.8% 2,000 0 0 0 0 $5.31 37 453,585 87,072 19.2% (5,018) 0 0 0 0 $5.65 37 453,585 82,054 18.1% 0 0 0 0 0 $6.21 37 453,585 82,054 18.1% 0 0 0 0 0 $6.02 37 453,585 82,054 18.1% (950) 0 0 0 0 $6.02 2010 37 453,585 81,104 17.9% 10,910 0 0 0 0 $6.05 2010 37 453,585 92,014 20.3% 7,864 0 0 0 0 $6.06 2010 37 453,585 99,878 22.0% 0 0 0 0 0 $5.13 2010 37 453,585 99,878 22.0% 3,815 0 0 0 0 $5.13 2009 37 453,585 103,693 22.9% 0 0 0 0 0 $5.21 2009 37 453,585 103,693 22.9% 0 0 0 0 0 $5.21 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 13
COLORADO SPRINGS MID-YEAR 2013 G R E A T E R C B D M A R K E T MARKET HIGHLIGHTS - FLEX & WAREHOUSE Deliveries, Absorption & Vacancy 40 Delivered SF Absorption SF Vacancy 12.0% 30 20 10 00 (10) (20) (30) (40) 2010 2010 2010 2010 2013 2013 1% 8.0% 6.0% 4.0% 2.0% % Percent Vacant Vacant Space Quoted Rental Rates 0.14 Direct SF Sublet SF $7.00 0.12 $6.00 0.10 8 6 4 2 Dollars/SF/Year $5.00 $4.00 $3.00 $2.00 $1.00 0 2013 2013 $0 2013 2013 Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2013 137 1,552,259 84,029 5.4% 16,312 0 0 0 0 $6.26 2013 137 1,552,259 100,341 6.5% 5,159 0 0 0 0 $6.33 137 1,552,259 105,500 6.8% 22,016 0 0 0 0 $5.86 137 1,552,259 127,516 8.2% (25,389) 0 0 0 0 $5.87 137 1,552,259 102,127 6.6% 21,913 0 0 0 0 $5.42 137 1,552,259 124,040 8.0% (7,037) 0 0 0 0 $5.25 137 1,552,259 117,003 7.5% 18,150 0 0 0 0 $5.12 137 1,552,259 135,153 8.7% (27,300) 0 0 0 0 $5.51 137 1,552,259 107,853 6.9% 14,270 0 0 0 0 $5.51 137 1,552,259 122,123 7.9% 0 0 0 0 0 $5.46 2010 137 1,552,259 122,123 7.9% 31,253 0 0 0 0 $5.46 2010 137 1,552,259 153,376 9.9% (25,847) 0 0 0 0 $5.38 2010 137 1,552,259 127,529 8.2% (5,253) 0 0 0 0 $4.84 2010 137 1,552,259 122,276 7.9% 18,400 0 0 0 0 $4.81 2009 137 1,552,259 140,676 9.1% (46,630) 0 0 0 0 $4.85 2009 137 1,552,259 94,046 6.1% 6,095 0 0 0 0 $5.56 14 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
N O R T H M A R K E T MARKET HIGHLIGHTS - FLEX & WAREHOUSE MID-YEAR 2013 COLORADO SPRINGS Deliveries, Absorption & Vacancy 0.100 80 60 40 20 00 (20) (40) Delivered SF Absorption SF Vacancy 2010 2010 2010 2010 2013 2013 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% % Percent Vacant Vacant Space Quoted Rental Rates 0.30 Direct SF Sublet SF $5.65 0.25 0.20 0.15 0.10 Dollars/SF/Year $5.60 $5.55 $5.50 $5.45 $5.40 5 $5.35 0 2013 2013 $5.30 2013 2013 Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2013 301 5,274,055 199,414 3.8% (23,455) 0 0 1 2,880 $5.61 2013 301 5,274,055 175,959 3.3% (31,559) 0 0 0 0 $5.49 301 5,274,055 144,400 2.7% 91,527 0 0 0 0 $5.44 301 5,274,055 235,927 4.5% 23,914 0 0 0 0 $5.42 302 5,276,215 262,001 5.0% (18,557) 0 0 0 0 $5.51 302 5,276,215 243,444 4.6% 34,789 0 0 0 0 $5.50 302 5,276,215 278,233 5.3% (32,096) 0 0 0 0 $5.40 302 5,276,215 246,137 4.7% 72,891 0 0 0 0 $5.48 302 5,276,215 319,028 6.0% 12,941 0 0 0 0 $5.50 302 5,276,215 331,969 6.3% 11,504 0 0 0 0 $5.68 2010 302 5,276,215 343,473 6.5% 46,447 0 0 0 0 $5.54 2010 302 5,276,215 389,920 7.4% 13,673 0 0 0 0 $5.65 2010 302 5,276,215 403,593 7.6% 32,583 0 0 0 0 $5.46 2010 302 5,276,215 436,176 8.3% 35,879 0 0 0 0 $5.44 2009 302 5,276,215 472,055 8.9% 66,059 1 6,258 0 0 $5.33 2009 301 5,269,957 531,856 10.1% (3,251) 0 0 1 6,258 $5.49 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 15
COLORADO SPRINGS MID-YEAR 2013 N O R T H E A S T M A R K E T MARKET HIGHLIGHTS - FLEX & WAREHOUSE Deliveries, Absorption & Vacancy 0.300 0.250 0.200 0.150 0.100 50 00 (50) (0.100) Delivered SF Absorption SF Vacancy 2010 2010 2010 2010 2013 2013 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% % Percent Vacant Vacant Space Quoted Rental Rates 0.25 Direct SF Sublet SF $9.00 $8.80 0.20 $8.60 0.15 0.10 5 Dollars/SF/Year $8.40 $8.20 $8.00 $7.80 $7.60 0 2013 2013 $7.40 2013 2013 Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2013 101 2,931,534 121,253 4.1% 8,765 0 0 1 155,220 $8.84 2013 101 2,931,534 130,018 4.4% 672 0 0 1 155,220 $8.66 101 2,931,534 130,690 4.5% 281,996 1 210,000 1 155,220 $8.55 100 2,721,534 202,686 7.4% (52,306) 0 0 1 210,000 $8.59 100 2,721,534 150,380 5.5% 60,644 0 0 1 210,000 $8.55 100 2,721,534 211,024 7.8% (12,240) 0 0 1 210,000 $7.94 100 2,721,534 198,784 7.3% (25,700) 0 0 1 210,000 $7.87 100 2,721,534 173,084 6.4% (1,600) 0 0 0 0 $8.28 100 2,721,534 171,484 6.3% (719) 0 0 0 0 $8.28 100 2,721,534 170,765 6.3% (5,940) 0 0 0 0 $7.24 2010 100 2,721,534 164,825 6.1% (4,412) 0 0 0 0 $7.24 2010 100 2,721,534 160,413 5.9% 70,237 0 0 0 0 $7.31 2010 100 2,721,534 230,650 8.5% (14,991) 0 0 0 0 $7.62 2010 100 2,721,534 215,659 7.9% (23,293) 0 0 0 0 $8.03 2009 100 2,721,534 192,366 7.1% 29,492 1 16,650 0 0 $9.01 2009 99 2,704,884 205,208 7.6% (15,948) 1 5,000 1 16,650 $8.88 16 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.
N O R T H W E S T M A R K E T MARKET HIGHLIGHTS - FLEX & WAREHOUSE MID-YEAR 2013 COLORADO SPRINGS Deliveries, Absorption & Vacancy 0.150 Delivered SF Absorption SF Vacancy 24.0% 0.100 50 00 (50) (0.100) (0.150) (0.200) 23.0% 22.0% 21.0% 2% 19.0% 18.0% Percent Vacant (0.250) 2010 2010 2010 2010 2013 2013 17.0% Vacant Space Quoted Rental Rates 1.80 1.60 1.40 1.20 1.00 0.80 0.60 Direct SF Sublet SF Dollars/SF/Year $6.60 $6.40 $6.20 $6.00 $5.80 $5.60 $5.40 0.40 $5.20 0.20 $5.00 0 2013 2013 $4.80 2013 2013 Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2013 210 7,349,006 1,409,198 19.2% 103,002 0 0 0 0 $5.34 2013 210 7,349,006 1,512,200 20.6% 53,447 0 0 0 0 $5.57 210 7,349,006 1,565,647 21.3% 23,542 0 0 0 0 $5.71 210 7,349,006 1,589,189 21.6% 76,083 0 0 0 0 $5.80 210 7,349,006 1,665,272 22.7% 15,527 0 0 0 0 $5.69 210 7,349,006 1,680,799 22.9% (204,906) 0 0 0 0 $6.37 210 7,349,006 1,475,893 20.1% 2,219 0 0 0 0 $6.85 210 7,349,006 1,478,112 20.1% 77,863 0 0 0 0 $6.88 210 7,349,006 1,555,975 21.2% 13,612 0 0 0 0 $6.91 210 7,349,006 1,569,587 21.4% 988 0 0 0 0 $6.80 2010 210 7,349,006 1,570,575 21.4% 32,184 0 0 0 0 $6.84 2010 210 7,349,006 1,602,759 21.8% 68,254 0 0 0 0 $7.11 2010 210 7,349,006 1,671,013 22.7% (2,927) 0 0 0 0 $7.13 2010 210 7,349,006 1,668,086 22.7% (35,828) 0 0 0 0 $7.10 2009 210 7,349,006 1,632,258 22.2% 96,652 0 0 0 0 $7.08 2009 210 7,349,006 1,728,910 23.5% (85,030) 0 0 0 0 $7.03 2013 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 17
COLORADO SPRINGS MID-YEAR 2013 S O U T H E A S T M A R K E T MARKET HIGHLIGHTS - FLEX & WAREHOUSE Deliveries, Absorption & Vacancy 0.250 Delivered SF Absorption SF Vacancy 16.0% 0.200 0.150 0.100 50 00 (50) 2010 2010 2010 2010 2013 2013 14.0% 12.0% 1% 8.0% 6.0% 4.0% 2.0% % Percent Vacant Vacant Space Quoted Rental Rates 1.40 Direct SF Sublet SF $5.85 1.20 $5.80 1.00 0.80 0.60 0.40 0.20 Dollars/SF/Year $5.75 $5.70 $5.65 $5.60 0 2013 2013 $5.55 2013 2013 Existing Inventory Vacancy Net Delivered Inventory UC Inventory Quoted Period # Bldgs Total RBA Vacant SF Vacancy % Absorption # Bldgs Total RBA # Bldgs Total RBA Rates 2013 866 13,631,636 1,096,546 8.0% 42,102 0 0 0 0 $5.69 2013 866 13,631,636 1,138,648 8.4% 73,357 0 0 0 0 $5.83 866 13,631,636 1,212,005 8.9% 49,253 0 0 0 0 $5.74 866 13,631,636 1,261,258 9.3% 128,026 1 125,060 0 0 $5.72 865 13,506,576 1,264,224 9.4% (9,525) 0 0 1 125,060 $5.67 865 13,506,576 1,254,699 9.3% 131,625 1 22,096 1 125,060 $5.69 864 13,484,480 1,364,228 10.1% (11,002) 0 0 1 22,096 $5.62 864 13,484,480 1,353,226 1% 89,374 1 24,035 1 22,096 $5.60 863 13,460,445 1,418,565 10.5% 101,862 0 0 1 24,035 $5.70 863 13,460,445 1,520,427 11.3% 92,497 0 0 1 24,035 $5.73 2010 863 13,460,445 1,612,924 12.0% 209,755 0 0 0 0 $5.72 2010 863 13,460,445 1,822,679 13.5% 82,371 0 0 0 0 $5.67 2010 863 13,460,445 1,905,050 14.2% 122,078 1 11,628 0 0 $5.87 2010 862 13,448,817 2,015,500 15.0% 2,883 2 14,496 1 11,628 $5.85 2009 860 13,434,321 2,003,887 14.9% (54,214) 0 0 3 26,124 $5.93 2009 860 13,434,321 1,949,673 14.5% (51,516) 0 0 2 14,496 $6.12 18 THE COSTAR INDUSTRIAL REPORT 2013 COSTAR GROUP, INC.