CoStar Industrial Statistics Y e a r - E n d 2 0 1 7
Year-End 2017 Dallas/Ft. Worth Table of Contents Table of Contents................................................................. A Methodology...................................................................... B Terms & Definitions................................................................ C Market Highlights & Overview........................................................ 1 CoStar Markets & Submarkets........................................................ 3 Inventory & Development Analysis..................................................... 4 Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance................................................................. 8 Figures at a Glance by Building Type & Market Figures at a Glance by Building Type & Submarket Historical Figures at a Glance Leasing Activity Analysis............................................................ 13 Select Top Lease Transactions Sales Activity Analysis.............................................................. 15 Sales Activity Analysis Select Top Sales Transactions Analysis of Individual CoStar Submarket Clusters........................................ 17 DFW Airport Market East Dallas Market Great SW/Arlington Market North Ft Worth Market Northeast Dallas Market Northwest Dallas Market South Dallas Market South Ft Worth Market South Stemmons Market 2018 CoStar Group, Inc. CoStar Industrial Statistics A
Dallas/Ft. Worth 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 1-877-7COSTAR, or visit our web site at www.costar.com 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. 1331 L ST NW Washington, DC 20005 (800) 204-5960 www.costar.com NASDAQ: CSGP B CoStar Industrial Statistics 2018 CoStar Group, Inc.
Year-End 2017 Dallas/Ft. Worth 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. 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 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
Dallas/Ft. Worth 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.
Overview Year-End 2017 Dallas/Ft. Worth Dallas/Ft. Worth s Decreases to 6.4% Net Absorption Positive 7,656,000 SF in the Quarter The Dallas/Ft. Worth Industrial market ended the fourth quarter 2017 with a vacancy rate of 6.4%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 7,656,000 square feet in the fourth quarter. Vacant sublease space decreased in the quarter, ending the quarter at 1,740,367 square feet. Rental rates ended the fourth quarter at $5.60, an increase over the previous quarter. A total of 34 buildings delivered to the market in the quarter totaling 6,840,572 square feet, with 20,911,406 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Dallas/Ft. Worth Industrial market was positive 7,656,000 square feet in the fourth quarter 2017. That compares to positive 4,998,256 square feet in the third quarter 2017, positive 6,124,784 square feet in the second quarter 2017, and positive 4,114,549 square feet in the first quarter 2017. The Flex building market recorded net absorption of negative (64,674) square feet in the fourth quarter 2017, compared to positive 313,453 square feet in the third quarter 2017, positive 1,152,199 in the second quarter 2017, and positive 1,193,898 in the first quarter 2017. The Warehouse building market recorded net absorption of positive 7,720,674 square feet in the fourth quarter 2017 compared to positive 4,684,803 square feet in the third quarter 2017, positive 4,972,585 in the second quarter 2017, and positive 2,920,651 in the first quarter 2017. The Industrial vacancy rate in the Dallas/Ft. Worth market area decreased to 6.4% at the end of the fourth quarter 2017. The vacancy rate was 6.5% at the end of the third quarter 2017, 6.5% at the end of the second quarter 2017, and 6.7% at the end of the first quarter 2017. Flex projects reported a vacancy rate of 6.3% at the end of the fourth quarter 2017, 6.0% at the end of the third quarter 2017, 6.1% at the end of the second quarter 2017, and 6.2% at the end of the first quarter 2017. Warehouse projects reported a vacancy rate of 6.4% at the end of the fourth quarter 2017, 6.6% at the end of third quarter 2017, 6.5% at the end of the second quarter 2017, and 6.8% at the end of the first quarter 2017. Largest Lease Signings The largest lease signings occurring in 2017 included: the 1,300,000-square-foot lease signed by Kohler Co. at 9500 S Polk St in the South Dallas market; the 1,004,400-square-foot deal signed by UPS at Arlington Commerce Center - Building E in the Great SW/Arlington market; and the 920,275-squarefoot lease signed by Amazon at DalParc I-20 - Building 1 in the South Dallas market. Sublease The amount of vacant sublease space in the Dallas/Ft. Worth market decreased to 1,740,367 square feet by the end of the fourth quarter 2017, from 2,159,281 square feet at the end of the third quarter 2017. There was 1,977,509 square feet vacant at the end of the second quarter 2017 and 2,167,503 square feet at the end of the first quarter 2017. Rates by Building Type 100-2017 14% Flex Warehouse Total Market 12% 10% Rate 8% 6% 4% 2% 0% 2001 4q 2002 4q 2003 4q 2004 4q 2005 4q 2006 4q 2007 4q 2008 4q 2009 4q 2010 4q 2011 4q 2012 4q 2013 4q 2014 4q 2015 4q 2016 4q 20174 2018 CoStar Group, Inc. CoStar Industrial Statistics 1
Dallas/Ft. Worth Year-End 2017 Overview Dallas/Ft. Worth s Flex projects reported vacant sublease space of 170,741 square feet at the end of fourth quarter 2017, down from the 395,168 square feet reported at the end of the third quarter 2017. There were 458,866 square feet of sublease space vacant at the end of the second quarter 2017, and 363,094 square feet at the end of the first quarter 2017. Warehouse projects reported decreased vacant sublease space from the third quarter 2017 to the fourth quarter 2017. Sublease vacancy went from 1,764,113 square feet to 1,569,626 square feet during that time. There was 1,518,643 square feet at the end of the second quarter 2017, and 1,804,409 square feet at the end of the first quarter 2017. Rental Rates The average quoted asking rental rate for available Industrial space was $5.60 per square foot per year at the end of the fourth quarter 2017 in the Dallas/Ft. Worth market area. This represented a 6.3% increase in quoted rental rates from the end of the third quarter 2017, when rents were reported at $5.27 per square foot. The average quoted rate within the Flex sector was $9.80 per square foot at the end of the fourth quarter 2017, while Warehouse rates stood at $4.75. At the end of the third quarter 2017, Flex rates were $9.52 per square foot, and Warehouse rates were $4.50. Deliveries and Construction During the fourth quarter 2017, 34 buildings totaling 6,840,572 square feet were completed in the Dallas/Ft. Worth market area. This compares to 31 buildings totaling 5,916,675 square feet that were completed in the third quarter 2017, 38 buildings totaling 4,705,121 square feet completed in the second quarter 2017, and 11,263,737 square feet in 57 buildings completed in the first quarter 2017. There were 20,911,406 square feet of Industrial space under construction at the end of the fourth quarter 2017. U.S. Comparison Past 10 Quarters Rate 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Dallas/Ft Worth United States 2015 3q Some of the notable 2017 deliveries include: SouthPort Logistics Park - Building 1, a 1,075,260-square-foot facility that delivered in first quarter 2017 and is now 0% occupied, and Arlington Commerce Center - Building E, a 1,004,400-squarefoot building that delivered in fourth quarter 2017 and is now 100% occupied. The largest projects underway at the end of fourth quarter 2017 were 9500 S Polk St, a 1,300,000-square-foot building with 100% of its space pre-leased, and Trammell Crow at 35 Eagle - Building A, a 1,089,642-square-foot facility that is 0% pre-leased. Inventory Total Industrial inventory in the Dallas/Ft. Worth market area amounted to 878,665,205 square feet in 21,243 buildings as of the end of the fourth quarter 2017. The Flex sector consisted of 132,473,569 square feet in 6,946 projects. The Warehouse sector consisted of 746,191,636 square feet in 14,297 buildings. Within the Industrial market there were 3,340 owner-occupied buildings accounting for 220,550,330 square feet of Industrial space. Sales Activity Tallying industrial building sales of 15,000 square feet or larger, Dallas/Ft Worth industrial sales figures fell during the third quarter 2017 in terms of dollar volume compared to the second quarter of 2017. In the third quarter, 16 industrial transactions closed with a total volume of $59,434,740. The 16 buildings totaled 810,207 square feet and the average price per square foot equated to $73.36 per square foot. That compares to 24 transactions totaling $264,130,187 in the second quarter. The total square footage was 4,060,725 for an average price per square foot of $65.05. Total year-to-date industrial building sales activity in 2017 is up compared to the previous year. In the first nine months of 2017, the market saw 72 industrial sales transactions with a total volume of $560,016,409. The price per square foot has averaged $61.40 this year. In the first nine months of 2016, the market posted 38 transactions with a total volume of $325,533,189. The price per square foot averaged $58.77. Cap rates have been lower in 2017, averaging 7.97%, compared to the first nine months of last year when they averaged 8.60%. One of the largest transactions that has occurred within the last four quarters in the Dallas/Ft Worth market is the sale of 2305 W Marshall Drive in Grand Prairie. This 667,635-squarefoot industrial building sold for $52,000,000, or $77.89 per square foot. The property sold on 1/25/2017. Report compiled by William Trentzsch, CoStar Senior Research Manager, and Tyler Grote, CoStar Research Manager. 2 CoStar Industrial Statistics 2018 CoStar Group, Inc.
Markets Year-End 2017 Dallas/Ft. Worth 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 Submarkets DFW Airport Ind E DFW Air/Las Colinas Ind W DFW Air/Grapevine Ind East Dallas Ind Central East Dallas Ind East Dallas/Mesquite Ind Forney/Terrll/Kauf Cy Ind Outlying Kaufman Cnty Ind Great SW/Arlington Ind Arlington Ind Lower Great Southwest Ind Upper Great Southwest Ind North Ft Worth Ind Meacham Fld/Fossil Cr Ind NE Tarrant/Alliance Ind Parker County Ind West Tarrant Ind Wise County Ind Northeast Dallas Ind Allen/McKinney Ind Delta County Ind Hunt County Ind NE Dallas/Garland Ind Outlying Collin Cnty Ind Plano Ind Richardson Ind Rockwall Ind Northwest Dallas Ind Denton Ind Lewisville Ind Metropolitan/Addison Ind N Stemmons/Valwood Ind South Dallas Ind Outlying Ellis Cnty Ind Redbird Airport Ind SE Dallas/I-45 Ind SW Dallas/US 67 Ind South Ft Worth Ind East Ft Worth Ind Hood County Ind Johnson County Ind Mansfield Ind N Central Ft Worth Ind S Cen.Tarrant Cnty Ind S Central Ft Worth Ind Southwest Tarrant Ind South Stemmons Ind East Brookhollow Ind East Hines North Ind Eastern Lonestar/Tpke Ind North Trinity Ind West Brookhollow Ind West Hines North Ind Western Lonestar/Tpke Ind 2018 CoStar Group, Inc. CoStar Industrial Statistics 3
Dallas/Ft. Worth Year-End 2017 Inventory & development Historical Deliveries 1982-2017 35.0 Deliveries Average Delivered SF Millions of SF 30.0 25.0 20.0 15.0 10.0 5.0 0.0 16.3 17.3 23.7 24.9 18.4 11.7 6.6 5.7 5.6 4.1 3.5 3.7 3.4 9.4 16.6 22.0 17.4 24.2 23.3 23.8 15.6 7.9 13.5 8.6 16.2 14.3 24.3 12.1 1.9 2.1 2.8 1982 1986 1990 1994 1998 2002 2006 2010 2014 8.2 21.6 19.9 17.9 30.3 * 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 South Dallas Ind 10 7,351,835 3,360,566 45.7% 57,378 735,183 North Ft Worth Ind 15 3,665,330 841,349 23.0% 60,232 244,355 Great SW/Arlington Ind 7 3,227,650 2,197,000 68.1% 61,721 461,093 DFW Airport Ind 8 2,174,702 1,039,176 47.8% 81,181 271,838 Northwest Dallas Ind 13 1,319,475 496,098 37.6% 53,293 101,498 Northeast Dallas Ind 12 1,246,640 144,000 11.6% 38,093 103,887 East Dallas Ind 1 877,230 877,230 100.0% 25,684 877,230 South Stemmons Ind 6 714,933 189,200 26.5% 28,257 119,155 South Ft Worth Ind 4 333,611 8,775 2.6% 26,618 83,403 Totals 76 20,911,406 9,153,394 43.8% 41,363 275,150 Recent Deliveries Leased & Un-Leased SF in Deliveries Since 2013 Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver 35.0 Leased Un-Leased 9,000 Preleased Un-Leased 30.0 8,000 Millions of SF 25.0 20.0 15.0 10.0 Thousands of SF 7,000 6,000 5,000 4,000 3,000 2,000 5.0 1,000 0.0 2013 2015 2017 0 2018 1q 2018 3q 4 CoStar Industrial Statistics 2018 CoStar Group, Inc.
Inventory & development Year-End 2017 Dallas/Ft. Worth Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 12.0 Construction Starts Deliveries 11.3 Millions of SF 10.0 8.0 6.0 4.0 2.0 6.3 5.1 2.5 1.5 6.6 2.2 4.5 8.7 3.5 6.8 7.7 4.0 3.3 3.3 8.0 5.7 7.7 4.5 8.4 4.9 4.9 3.8 7.5 5.8 5.8 6.0 4.7 4.3 5.9 5.4 6.8 0.0 2014 1q 2015 1q 2016 1q 2017 1q 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 80 999,760 635,964 63.6% $9.22 88,180 911,580 50,000 SF - 99,999 SF 16 1,164,554 722,374 62.0% $6.68 255,000 909,554 100,000 SF - 249,999 SF 30 4,299,853 2,387,909 55.5% $4.72 769,000 3,530,853 250,000 SF - 499,999 SF 25 9,097,116 4,137,334 45.5% $4.02 1,856,626 7,240,490 >= 500,000 SF 18 13,563,841 7,729,811 57.0% $3.89 1,139,448 12,424,393 Recent Development by Tenancy Existing Inventory 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 14% 19% 85% 15% 50% 50% 86% 81% Multi Single Multi Single Flex Warehouse Multi Single 2018 CoStar Group, Inc. CoStar Industrial Statistics 5
Dallas/Ft. Worth Year-End 2017 Inventory & development 6 CoStar Industrial Statistics 2018 CoStar Group, Inc.
Inventory & development Year-End 2017 Dallas/Ft. Worth 2018 CoStar Group, Inc. CoStar Industrial Statistics 7
Dallas/Ft. Worth Year-End 2017 Figures at a Glance Flex Market Statistics Year-End 2017 Existing Inventory YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates DFW Airport Ind 340 9,102,729 822,090 838,075 9.2% 9,709 6,600 0 $9.66 East Dallas Ind 653 8,519,849 921,671 921,671 10.8% (31,744) 0 0 $9.16 Great SW/Arlington Ind 496 10,273,588 609,141 617,258 6.0% 354,085 11,000 0 $9.36 North Ft Worth Ind 297 5,771,411 67,487 70,287 1.2% 727,647 262,000 62,000 $8.98 Northeast Dallas Ind 1,309 31,525,978 2,562,346 2,598,574 8.2% 1,191,301 1,944,695 270,000 $9.66 Northwest Dallas Ind 744 21,122,331 1,480,859 1,504,325 7.1% 402,953 349,281 484,000 $10.12 South Dallas Ind 381 4,439,850 85,204 85,204 1.9% (8,163) 0 0 $7.75 South Ft Worth Ind 924 13,513,721 484,995 544,892 4.0% (35,216) 18,600 0 $8.14 South Stemmons Ind 1,802 28,204,112 1,115,919 1,140,167 4.0% (15,696) 24,800 16,000 $11.15 Totals 6,946 132,473,569 8,149,712 8,320,453 6.3% 2,594,876 2,616,976 832,000 $9.80 Warehouse Market Statistics Year-End 2017 Existing Inventory YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates DFW Airport Ind 571 64,852,939 3,149,584 3,314,500 5.1% 1,653,707 1,976,219 2,174,702 $4.69 East Dallas Ind 1,321 42,180,777 1,358,976 1,368,976 3.2% 848,785 351,874 877,230 $4.50 Great SW/Arlington Ind 1,309 101,132,733 9,094,294 9,274,667 9.2% 3,544,509 7,001,315 3,227,650 $4.40 North Ft Worth Ind 1,241 86,865,938 4,453,190 4,473,990 5.2% 5,721,743 3,713,327 3,603,330 $5.33 Northeast Dallas Ind 1,764 85,532,412 3,983,259 4,645,629 5.4% 1,520,349 2,098,616 976,640 $4.94 Northwest Dallas Ind 1,339 89,887,173 3,269,939 3,391,709 3.8% 3,498,388 2,245,954 835,475 $5.14 South Dallas Ind 1,300 92,012,603 9,563,743 9,811,135 10.7% 4,460,028 6,933,030 7,351,835 $3.67 South Ft Worth Ind 2,516 78,050,691 4,165,618 4,223,218 5.4% (800,962) 1,046,053 333,611 $5.63 South Stemmons Ind 2,936 105,676,370 7,248,158 7,352,563 7.0% (147,834) 742,741 698,933 $5.17 Totals 14,297 746,191,636 46,286,761 47,856,387 6.4% 20,298,713 26,109,129 20,079,406 $4.75 Total Industrial Market Statistics Year-End 2017 Existing Inventory YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates DFW Airport Ind 911 73,955,668 3,971,674 4,152,575 5.6% 1,663,416 1,982,819 2,174,702 $5.83 East Dallas Ind 1,974 50,700,626 2,280,647 2,290,647 4.5% 817,041 351,874 877,230 $4.95 Great SW/Arlington Ind 1,805 111,406,321 9,703,435 9,891,925 8.9% 3,898,594 7,012,315 3,227,650 $4.99 North Ft Worth Ind 1,538 92,637,349 4,520,677 4,544,277 4.9% 6,449,390 3,975,327 3,665,330 $5.53 Northeast Dallas Ind 3,073 117,058,390 6,545,605 7,244,203 6.2% 2,711,650 4,043,311 1,246,640 $6.48 Northwest Dallas Ind 2,083 111,009,504 4,750,798 4,896,034 4.4% 3,901,341 2,595,235 1,319,475 $6.37 South Dallas Ind 1,681 96,452,453 9,648,947 9,896,339 10.3% 4,451,865 6,933,030 7,351,835 $3.74 South Ft Worth Ind 3,440 91,564,412 4,650,613 4,768,110 5.2% (836,178) 1,064,653 333,611 $6.04 South Stemmons Ind 4,738 133,880,482 8,364,077 8,492,730 6.3% (163,530) 767,541 714,933 $6.27 Totals 21,243 878,665,205 54,436,473 56,176,840 6.4% 22,893,589 28,726,105 20,911,406 $5.60 8 CoStar Industrial Statistics 2018 CoStar Group, Inc.
Figures at a Glance Year-End 2017 Dallas/Ft. Worth Flex Submarket Statistics Year-End 2017 Existing Inventory YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Allen/McKinney Ind 88 2,414,388 129,290 137,845 5.7% 66,428 68,000 190,000 $11.84 Arlington Ind 163 2,945,018 75,495 78,632 2.7% 272,080 11,000 0 $11.11 Central East Dallas. 441 5,054,695 117,568 117,568 2.3% (53,682) 0 0 $11.53 Delta County Ind 0 0 0 0 0.0% 0 0 0 $0.00 Denton Ind 58 1,918,456 60,300 60,300 3.1% 16,811 0 14,000 $7.38 E DFW Air/Las Colina. 154 6,511,434 683,113 694,259 10.7% (36,880) 0 0 $9.95 East Brookhollow Ind 120 1,921,557 139,974 139,974 7.3% 43,208 0 0 $14.84 East Dallas/Mesquite. 156 2,907,704 781,265 781,265 26.9% 36,076 0 0 $11.07 East Ft Worth Ind 287 4,820,163 135,594 135,594 2.8% 5,492 0 0 $7.27 East Hines North Ind 395 6,644,452 235,411 235,411 3.5% (24,600) 0 0 $8.15 Eastern Lonestar/Tpk. 159 2,244,203 100,123 100,123 4.5% (68,123) 0 16,000 $6.28 Forney/Terrll/Kauf C. 50 511,745 22,838 22,838 4.5% (14,138) 0 0 $4.74 Hood County Ind 19 184,303 8,953 8,953 4.9% 27,122 0 0 $6.74 Hunt County Ind 23 211,127 0 0 0.0% 14,250 14,250 0 $12.35 Johnson County Ind 51 563,359 10,780 10,780 1.9% 920 0 0 $11.12 Lewisville Ind 137 3,201,979 195,092 200,634 6.3% 360,527 330,000 470,000 $12.07 Lower Great Southwes. 190 3,204,191 154,565 154,565 4.8% 35,555 0 0 $8.43 Mansfield Ind 28 844,700 8,176 8,176 1.0% (4,796) 0 0 $13.84 Meacham Fld/Fossil C. 125 2,431,474 23,584 23,584 1.0% 244,477 12,000 0 $8.79 Metropolitan/Addison. 277 8,819,666 573,445 573,445 6.5% 126,821 0 0 $11.01 N Central Ft Worth I. 171 1,954,354 29,089 29,089 1.5% 45,548 0 0 $9.08 N Stemmons/Valwood I. 272 7,182,230 652,022 669,946 9.3% (101,206) 19,281 0 $8.21 NE Dallas/Garland In. 624 11,275,082 472,646 482,868 4.3% 903,014 1,000,000 0 $6.89 NE Tarrant/Alliance. 98 2,535,687 9,310 9,310 0.4% 472,851 250,000 62,000 $9.40 North Trinity Ind 522 6,467,976 304,962 322,594 5.0% (4,640) 0 0 $15.08 Outlying Collin Cnty. 16 158,191 65,300 65,300 41.3% 12,825 65,225 80,000 $11.90 Outlying Ellis Cnty. 46 432,743 0 0 0.0% 8,202 0 0 $9.00 Outlying Kaufman Cnt. 6 45,705 0 0 0.0% 0 0 0 $0.00 Parker County Ind 32 305,118 10,080 12,880 4.2% (2,769) 0 0 $9.83 Plano Ind 223 7,551,052 833,131 850,582 11.3% 111,239 467,460 0 $11.84 Redbird Airport Ind 64 811,295 11,199 11,199 1.4% (1,499) 0 0 $7.99 Richardson Ind 299 9,453,158 1,041,653 1,041,653 11.0% 87,971 329,760 0 $9.44 Rockwall Ind 36 462,980 20,326 20,326 4.4% (4,426) 0 0 $10.54 S Cen.Tarrant Cnty I. 80 1,816,790 55,794 66,491 3.7% 28,979 18,600 0 $7.05 S Central Ft Worth I. 220 2,389,996 62,633 62,633 2.6% 80,895 0 0 $9.04 SE Dallas/I-45 Ind 98 1,367,022 36,194 36,194 2.6% (23,230) 0 0 $6.80 Southwest Tarrant In. 68 940,056 173,976 223,176 23.7% (219,376) 0 0 $8.46 SW Dallas/US 67 Ind 173 1,828,790 37,811 37,811 2.1% 8,364 0 0 $7.93 Upper Great Southwes. 143 4,124,379 379,081 384,061 9.3% 46,450 0 0 $9.00 W DFW Air/Grapevine. 186 2,591,295 138,977 143,816 5.5% 46,589 6,600 0 $8.63 West Brookhollow Ind 381 7,850,680 265,719 272,335 3.5% 5,861 24,800 0 $8.06 West Hines North Ind 144 2,374,949 69,730 69,730 2.9% 22,198 0 0 $9.08 West Tarrant Ind 31 414,275 22,013 22,013 5.3% (7,346) 0 0 $15.79 Western Lonestar/Tpk. 81 700,295 0 0 0.0% 10,400 0 0 $8.65 Wise County Ind 11 84,857 2,500 2,500 2.9% 20,434 0 0 $4.65 Totals 6,946 132,473,569 8,149,712 8,320,453 6.3% 2,594,876 2,616,976 832,000 $9.80 2018 CoStar Group, Inc. CoStar Industrial Statistics 9
Dallas/Ft. Worth Year-End 2017 Figures at a Glance Warehouse Submarket Statistics Year-End 2017 Existing Inventory YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Allen/McKinney Ind 195 9,297,725 176,575 176,575 1.9% 72,922 130,000 202,270 $6.17 Arlington Ind 463 19,678,316 2,218,496 2,254,122 11.5% 2,018,658 2,778,133 901,132 $4.33 Central East Dallas. 507 15,052,270 326,561 336,561 2.2% 1,157 0 0 $5.12 Delta County Ind 4 113,699 0 0 0.0% 0 0 0 $0.00 Denton Ind 286 10,540,769 368,242 401,742 3.8% 855,569 958,280 310,969 $6.11 E DFW Air/Las Colina. 279 47,969,527 2,445,180 2,605,796 5.4% 1,201,489 1,629,177 1,527,906 $4.39 East Brookhollow Ind 178 7,352,596 12,760 12,760 0.2% (7,790) 0 0 $8.24 East Dallas/Mesquite. 469 18,260,348 732,765 732,765 4.0% 648,967 351,874 877,230 $5.13 East Ft Worth Ind 713 20,791,178 1,337,076 1,388,676 6.7% 44,725 112,800 0 $5.25 East Hines North Ind 531 15,479,970 286,066 293,566 1.9% 96,642 0 0 $5.09 Eastern Lonestar/Tpk. 375 24,389,731 1,415,893 1,473,703 6.0% (67,146) 518,241 0 $3.70 Forney/Terrll/Kauf C. 310 8,365,515 248,600 248,600 3.0% 210,090 0 0 $4.03 Hood County Ind 106 844,629 59,084 59,084 7.0% (7,680) 27,000 0 $6.03 Hunt County Ind 138 7,110,532 639,901 639,901 9.0% (206,936) 0 0 $5.48 Johnson County Ind 408 9,957,406 153,062 153,062 1.5% 358,543 372,939 8,000 $6.40 Lewisville Ind 269 22,738,441 823,336 823,336 3.6% 1,640,727 484,011 288,606 $5.60 Lower Great Southwes. 397 33,818,366 723,692 731,102 2.2% 482,997 70,000 1,000,000 $4.50 Mansfield Ind 154 4,720,568 173,582 173,582 3.7% 68,705 0 0 $4.31 Meacham Fld/Fossil C. 497 39,876,661 1,619,453 1,630,453 4.1% 2,081,113 2,043,711 1,053,485 $5.57 Metropolitan/Addison. 239 12,721,549 506,745 506,745 4.0% (76,726) 0 0 $5.52 N Central Ft Worth I. 343 9,576,890 157,706 157,706 1.6% 115,930 0 0 $6.14 N Stemmons/Valwood I. 545 43,886,414 1,571,616 1,659,886 3.8% 1,078,818 803,663 235,900 $4.58 NE Dallas/Garland In. 847 41,603,649 2,254,397 2,851,986 6.9% 862,867 1,225,366 764,400 $4.12 NE Tarrant/Alliance. 310 38,001,609 2,335,075 2,335,075 6.1% 3,619,533 1,602,016 2,389,845 $4.75 North Trinity Ind 430 7,256,734 353,369 357,669 4.9% (63,956) 0 0 $8.07 Outlying Collin Cnty. 63 1,009,624 25,100 25,100 2.5% 170,149 168,000 0 $10.14 Outlying Ellis Cnty. 334 12,222,478 5,000 241,592 2.0% 166,356 0 0 $4.02 Outlying Kaufman Cnt. 35 502,644 51,050 51,050 10.2% (11,429) 0 0 $3.33 Parker County Ind 216 3,152,004 146,072 146,072 4.6% (16,701) 6,000 20,000 $7.21 Plano Ind 295 14,144,688 733,748 789,096 5.6% 243,616 185,750 9,970 $8.05 Redbird Airport Ind 201 19,239,875 390,642 395,642 2.1% 1,051,592 0 0 $3.55 Richardson Ind 111 9,155,456 117,288 126,721 1.4% (5,519) 0 0 $5.74 Rockwall Ind 111 3,097,039 36,250 36,250 1.2% 383,250 389,500 0 $6.73 S Cen.Tarrant Cnty I. 348 21,709,257 2,027,263 2,033,263 9.4% (1,288,636) 504,814 308,061 $5.01 S Central Ft Worth I. 331 8,602,742 178,094 178,094 2.1% (53,474) 0 0 $4.99 SE Dallas/I-45 Ind 400 34,057,052 6,337,705 6,343,505 18.6% 3,140,840 6,876,030 5,103,455 $3.70 Southwest Tarrant In. 113 1,848,021 79,751 79,751 4.3% (39,075) 28,500 17,550 $8.45 SW Dallas/US 67 Ind 365 26,493,198 2,830,396 2,830,396 10.7% 101,240 57,000 2,248,380 $3.52 Upper Great Southwes. 449 47,636,051 6,152,106 6,289,443 13.2% 1,042,854 4,153,182 1,326,518 $4.41 W DFW Air/Grapevine. 292 16,883,412 704,404 708,704 4.2% 452,218 347,042 646,796 $7.06 West Brookhollow Ind 1,050 34,856,995 451,636 481,776 1.4% (495,443) 0 0 $4.76 West Hines North Ind 222 5,287,894 137,285 141,940 2.7% 110,137 0 0 $5.05 West Tarrant Ind 108 4,183,766 206,741 206,741 4.9% (29,003) 35,350 90,000 $5.56 Western Lonestar/Tpk. 150 11,052,450 4,591,149 4,591,149 41.5% 279,722 224,500 698,933 $4.49 Wise County Ind 110 1,651,898 145,849 155,649 9.4% 66,801 26,250 50,000 $6.06 Totals 14,297 746,191,636 46,286,761 47,856,387 6.4% 20,298,713 26,109,129 20,079,406 $4.75 10 CoStar Industrial Statistics 2018 CoStar Group, Inc.
Figures at a Glance Year-End 2017 Dallas/Ft. Worth Total Industrial Submarket Statistics Year-End 2017 Existing Inventory YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Allen/McKinney Ind 283 11,712,113 305,865 314,420 2.7% 139,350 198,000 392,270 $8.09 Arlington Ind 626 22,623,334 2,293,991 2,332,754 10.3% 2,290,738 2,789,133 901,132 $4.93 Central East Dallas. 948 20,106,965 444,129 454,129 2.3% (52,525) 0 0 $6.11 Delta County Ind 4 113,699 0 0 0.0% 0 0 0 $0.00 Denton Ind 344 12,459,225 428,542 462,042 3.7% 872,380 958,280 324,969 $6.22 E DFW Air/Las Colina. 433 54,480,961 3,128,293 3,300,055 6.1% 1,164,609 1,629,177 1,527,906 $5.55 East Brookhollow Ind 298 9,274,153 152,734 152,734 1.6% 35,418 0 0 $10.05 East Dallas/Mesquite. 625 21,168,052 1,514,030 1,514,030 7.2% 685,043 351,874 877,230 $5.76 East Ft Worth Ind 1,000 25,611,341 1,472,670 1,524,270 6.0% 50,217 112,800 0 $5.51 East Hines North Ind 926 22,124,422 521,477 528,977 2.4% 72,042 0 0 $6.03 Eastern Lonestar/Tpk. 534 26,633,934 1,516,016 1,573,826 5.9% (135,269) 518,241 16,000 $3.84 Forney/Terrll/Kauf C. 360 8,877,260 271,438 271,438 3.1% 195,952 0 0 $4.09 Hood County Ind 125 1,028,932 68,037 68,037 6.6% 19,442 27,000 0 $6.21 Hunt County Ind 161 7,321,659 639,901 639,901 8.7% (192,686) 14,250 0 $6.86 Johnson County Ind 459 10,520,765 163,842 163,842 1.6% 359,463 372,939 8,000 $6.50 Lewisville Ind 406 25,940,420 1,018,428 1,023,970 3.9% 2,001,254 814,011 758,606 $7.32 Lower Great Southwes. 587 37,022,557 878,257 885,667 2.4% 518,552 70,000 1,000,000 $5.15 Mansfield Ind 182 5,565,268 181,758 181,758 3.3% 63,909 0 0 $4.64 Meacham Fld/Fossil C. 622 42,308,135 1,643,037 1,654,037 3.9% 2,325,590 2,055,711 1,053,485 $5.71 Metropolitan/Addison. 516 21,541,215 1,080,190 1,080,190 5.0% 50,095 0 0 $8.19 N Central Ft Worth I. 514 11,531,244 186,795 186,795 1.6% 161,478 0 0 $6.36 N Stemmons/Valwood I. 817 51,068,644 2,223,638 2,329,832 4.6% 977,612 822,944 235,900 $5.19 NE Dallas/Garland In. 1,471 52,878,731 2,727,043 3,334,854 6.3% 1,765,881 2,225,366 764,400 $4.51 NE Tarrant/Alliance. 408 40,537,296 2,344,385 2,344,385 5.8% 4,092,384 1,852,016 2,451,845 $4.91 North Trinity Ind 952 13,724,710 658,331 680,263 5.0% (68,596) 0 0 $10.61 Outlying Collin Cnty. 79 1,167,815 90,400 90,400 7.7% 182,974 233,225 80,000 $11.11 Outlying Ellis Cnty. 380 12,655,221 5,000 241,592 1.9% 174,558 0 0 $4.60 Outlying Kaufman Cnt. 41 548,349 51,050 51,050 9.3% (11,429) 0 0 $3.33 Parker County Ind 248 3,457,122 156,152 158,952 4.6% (19,470) 6,000 20,000 $7.40 Plano Ind 518 21,695,740 1,566,879 1,639,678 7.6% 354,855 653,210 9,970 $9.95 Redbird Airport Ind 265 20,051,170 401,841 406,841 2.0% 1,050,093 0 0 $3.61 Richardson Ind 410 18,608,614 1,158,941 1,168,374 6.3% 82,452 329,760 0 $8.71 Rockwall Ind 147 3,560,019 56,576 56,576 1.6% 378,824 389,500 0 $7.62 S Cen.Tarrant Cnty I. 428 23,526,047 2,083,057 2,099,754 8.9% (1,259,657) 523,414 308,061 $5.20 S Central Ft Worth I. 551 10,992,738 240,727 240,727 2.2% 27,421 0 0 $5.72 SE Dallas/I-45 Ind 498 35,424,074 6,373,899 6,379,699 18.0% 3,117,610 6,876,030 5,103,455 $3.72 Southwest Tarrant In. 181 2,788,077 253,727 302,927 10.9% (258,451) 28,500 17,550 $8.46 SW Dallas/US 67 Ind 538 28,321,988 2,868,207 2,868,207 10.1% 109,604 57,000 2,248,380 $3.78 Upper Great Southwes. 592 51,760,430 6,531,187 6,673,504 12.9% 1,089,304 4,153,182 1,326,518 $4.99 W DFW Air/Grapevine. 478 19,474,707 843,381 852,520 4.4% 498,807 353,642 646,796 $7.63 West Brookhollow Ind 1,431 42,707,675 717,355 754,111 1.8% (489,582) 24,800 0 $5.16 West Hines North Ind 366 7,662,843 207,015 211,670 2.8% 132,335 0 0 $6.17 West Tarrant Ind 139 4,598,041 228,754 228,754 5.0% (36,349) 35,350 90,000 $6.59 Western Lonestar/Tpk. 231 11,752,745 4,591,149 4,591,149 39.1% 290,122 224,500 698,933 $4.54 Wise County Ind 121 1,736,755 148,349 158,149 9.1% 87,235 26,250 50,000 $5.78 Totals 21,243 878,665,205 54,436,473 56,176,840 6.4% 22,893,589 28,726,105 20,911,406 $5.60 2018 CoStar Group, Inc. CoStar Industrial Statistics 11
Dallas/Ft. Worth Year-End 2017 Figures at a Glance 12 CoStar Industrial Statistics 2018 CoStar Group, Inc.
Leasing Activity Year-End 2017 Dallas/Ft. Worth Historical Rental Rates Based on Quoted Rental Rates $12.00 Flex Warehouse Total Market $10.00 Dollars/SF/Year $8.00 $6.00 $4.00 $2.00 $0.00 2001 4q 2003 4q 2005 4q 2007 4q 2009 4q 2011 4q 2013 4q 2015 4q 20174q by Available Space Type by Building Type Percent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Building Type Dallas/Ft Worth United States Dallas/Ft Worth United States 3% 4% 15% 14% 85% 86% 97% 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 Dallas/Ft Worth United States 14.0 12.4 $6.00 12.0 Dollars/SF/Year $5.00 $4.00 $3.00 $2.00 Millions 10.0 8.0 6.0 4.0 4.2 $1.00 $0.00 2015 3q 2.0 0.0 0.0 0.3 0.0 0.2 2018 1q 2018 3q 2019 1q * Includes Under Construction Space 2018 CoStar Group, Inc. CoStar Industrial Statistics 13
Dallas/Ft. Worth Year-End 2017 Leasing Activity 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 1 9500 S Polk St SW Dallas/US 67 Ind 1,300,000 3rd Kohler Co. N/A CBRE 2 Arlington Commerce Center - Building E Arlington Ind 1,004,400 1st UPS N/A Exeter Property Group 3 DalParc I-20 - Building 1 SE Dallas/I-45 Ind 920,275 3rd Amazon N/A CBRE 4 Wayfair SE Dallas/I-45 Ind 874,566 3rd Wayfair N/A N/A 5 Wildlife 6 Upper Great Southwest Ind 703,040 3rd Haier N/A Crow Holdings Industrial 6 Sandy Lake 121 Distribution Center E DFW Air/Las Colinas Ind 604,800 3rd Amazon.com CBRE Cushman & Wakeeld of Texas, Inc. 7 300 Gateway Pky NE Tarrant/Alliance Ind 603,050 4th N/A N/A CBRE 8 Lasko Products Inc* Meacham Fld/Fossil Cr Ind 505,000 1st Lasko Products, Inc. N/A N/A 9 35/820 @ Mercantile Center Meacham Fld/Fossil Cr Ind 492,322 2nd S&S Activewear Cushman & Wakeeld of Texas, Inc.; Lee & Associates 10 Commerce 20 - Building 2 SE Dallas/I-45 Ind 488,780 2nd N/A N/A CBRE 11 Millwork Distribution Center* SW Dallas/US 67 Ind 476,341 2nd DW Distribution Inc. N/A N/A 12 DFW Trade Center II* E DFW Air/Las Colinas Ind 401,572 1st KidKraft N/A CBRE 13 Liberty Park GSW South - Building 2 Arlington Ind 365,000 2nd Fedex N/A Liberty Property Trust 14 Alliance Westport 19 NE Tarrant/Alliance Ind 360,000 2nd N/A N/A Hillwood Properties 15 FedEx Ground Distribution Facility East Dallas/Mesquite Ind 351,874 2nd FedEx N/A N/A 16 Northport 35 Business Center - Building A NE Tarrant/Alliance Ind 349,425 1st Allen Distribution N/A Stream Realty Partners, LP 17 Southpointe 20/35 - Building 1 SE Dallas/I-45 Ind 343,421 2nd N/A CBRE Holt Lunsford Commercial, Inc. 18 Prologis Freeport Corporate Center 3* E DFW Air/Las Colinas Ind 335,480 1st KGP Logistics Lee & Associates Prologis 19 South Central Industrial SE Dallas/I-45 Ind 305,000 4th N/A N/A CBRE 20 5000 South Fwy S Cen.Tarrant Cnty Ind 300,890 4th N/A N/A TCRG Properties, LLC. 21 Ridge Railhead - Building 1 Meacham Fld/Fossil Cr Ind 299,000 1st Dematic N/A Lee & Associates 22 1700 Meacham Blvd* Meacham Fld/Fossil Cr Ind 295,000 1st Lasko Products N/A N/A 23 Prologis Northgate 18* NE Dallas/Garland Ind 267,690 2nd Speed FC N/A CBRE 24 35/20 Crossroads Distribution Center S Cen.Tarrant Cnty Ind 264,125 2nd N/A N/A Sealy & Company; Holt Lunsford Comm 25 Point West 400 E DFW Air/Las Colinas Ind 263,625 3rd XPO Logistics N/A Duke Realty Corporation 26 Logistics Pointe Distribution Ctr - Building NE Dallas/Garland Ind 260,959 2nd The Kraft Heinz Company CBRE CBRE 27 Liberty Park GSW North Building 2 Upper Great Southwest Ind 225,889 1st Geodis Logistics LLC CBRE JLL 28 Park 20/35 - Building 7 SE Dallas/I-45 Ind 211,948 1st Mars Pet Care N/A CBRE 29 Alliance Airport NE Tarrant/Alliance Ind 209,081 1st Robinson Aerospace N/A CBRE 30 Riverbend West Distribution Center East Ft Worth Ind 192,350 2nd Ecolab Jackson Cooksey Holt Lunsford Commercial, Inc. 31 Great Southwest Distribution Center - Lower Great Southwest Ind 179,875 3rd Biagi Brothers N/A Prologis 32 2901 W Kingsley Rd NE Dallas/Garland Ind 168,657 4th Hayes Retail N/A JLL 33 DFW Distribution Center* E DFW Air/Las Colinas Ind 167,820 1st BFS Services, Inc. Lee & Associates Transpacic Development Company 34 DCT Waters Ridge Lewisville Ind 165,705 3rd The Hillman Group, Inc. N/A Lee & Associates 35 Blue Linx* Meacham Fld/Fossil Cr Ind 161,911 1st Blue Linx N/A N/A 36 CentrePort Upper Great Southwest Ind 159,068 4th Image MicroSystems Stream Realty Partners, LP CBRE 37 Lasko Products, Inc.* Meacham Fld/Fossil Cr Ind 152,052 1st Lasko Products N/A N/A 38 CentrePort 5 Upper Great Southwest Ind 148,357 1st Suddath N/A CBRE 39 GSW Distribution Center 20 Lower Great Southwest Ind 147,645 1st PetMate Spartan Partners Inc Lee & Associates 40 Patriot Drive II* E DFW Air/Las Colinas Ind 140,000 1st CEVA Logistics N/A Stream Realty Partners, LP * Renewal 14 CoStar Industrial Statistics 2018 CoStar Group, Inc.
Sales Activity Year-End 2017 Dallas/Ft. Worth The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter 11.0% Cap Rate Price/SF $290 10.0% 9.0% $240 Cap Rate Percentage 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% $190 $140 $90 Dollars/SF 1.0% 2014 4q 2015 4q 2016 4q $40 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 Oct. 2016 - Sept. 2017 $350 Sales Volume Price/SF $90 Bldg Size # RBA $ Volume Price/SF Cap Rate Millions of Sales Volume Dollars $300 $250 $200 $150 $100 $80 $70 $60 $50 $40 $30 $20 Price/SF < 25,000 SF 25K-99K SF 100K-249K SF 44 645,307 $56,549,308 $ 87.63 7.95% 37 1,698,510 $73,682,551 $ 43.38 8.17% 13 1,910,829 $123,800,103 $ 64.79 8.00% $50 $10 $0 2014 1q 2015 1q 2016 1q 2017 1q $0 >250K SF 17 9,942,526 $640,563,360 $ 64.43 6.66% 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 $90 Dallas/Ft Worth US 11.0% Dallas/Ft Worth US 10.0% $80 9.0% $70 $60 $50 Cap Rate Percentage 8.0% 7.0% 6.0% 5.0% 4.0% $40 3.0% 2.0% $30 1.0% 2014 1q 2015 1q 2016 1q 2017 1q 2014 1q 2015 1q 2016 1q 2017 1q Source: CoStar COMPS Source: CoStar COMPS 2018 CoStar Group, Inc. CoStar Industrial Statistics 15
16 CoStar Industrial Statistics 2018 CoStar Group, Inc. Dallas/Ft. Worth Year-End 2017 Sales Activity