1. www.CharlestonCommercialMarketForecast.com Commercial Real Estate Market Forecast October 8, 2014 | Daniel Island Club

2. www.CharlestonCommercialMarketForecast.com Keep Up Digitally EVENT HASHTAG #CHSCMF CHECK OUT PANELISTS BIOS AT: CharlestonCommericalMarketForecast.Com 3. www.CharlestonCommercialMarketForecast.com Commercial Real Estate Market Forecast October 8, 2014 | Daniel Island Club 4. www.CharlestonCommercialMarketForecast.com Thank You to our Planning Committee KAREN BACOT, The Beach Company BLAIR BELK, Belk | Lucy SHEP BENJAMIN, Caldwell Commercial THOMAS BOULWARE, NAI Avant BRENT CASE, Coldwell Banker Commercial Atlantic ASHLEY FARRELL, Landmark Enterprises Brokerage CHARLES HUDGENS, Ameris Bank 5. www.CharlestonCommercialMarketForecast.com Thank You to our Planning Committee JIM JORDAN, Avison Young DREW MUNNERLYN, Lee & Associates ASHLEY RUTHSATZ, College of Charleston GERRY SCHAUER, Avison Young VITRE STEPHENS, Avison Young CLAYTON TAYLOR, Taylor Consulting ELAINE WORZALA, College of Charleston 6. www.CharlestonCommercialMarketForecast.com TRI-CITY BRONZE SPONSORS ALLIANCE CONSULTING ENGINEERS COSTAR GROUP ELLIOTT DAVIS GRAYBILL, LANSCHE, & VINZANI, LLC HAYNSWORTH SINKLER BOYD, P.A. ICSC LANDMARK BUILDERS THE SC REALTORS ASSOCIATION Thank You Charleston Bronze Sponsors 7. www.CharlestonCommercialMarketForecast.com TRI-CITY SILVER SPONSOR NELSON MULLINS RILEY & SCARBOROUGH, LLP 8. www.CharlestonCommercialMarketForecast.com CITY GOLD SPONSORS 9. www.CharlestonCommercialMarketForecast.com CHARLESTON TABLES 10. www.CharlestonCommercialMarketForecast.com STAGE SPONSOR 11. www.CharlestonCommercialMarketForecast.com CHARLESTON BRONZE SPONSORS 12. www.CharlestonCommercialMarketForecast.com CHARLESTON SILVER SPONSORS 13. www.CharlestonCommercialMarketForecast.com CHARLESTON GOLD SPONSORS 14. www.CharlestonCommercialMarketForecast.com Jim Hill Vice President, Commercial and Industrial Development & Land Sales MWV Community Development and Land Management Division 15. www.CharlestonCommercialMarketForecast.com Margaret H. Brockinton, President Kaitland McCutcheon, Leasing, B.I.C. 843.266.7990 Margaret@carolinaretailproperty.com Kaitland@carolinaretailproperty.com 16. www.CharlestonCommercialMarketForecast.com THE CORNER AT WESCOTT Wescott Blvd & Dorchester Road, North Charleston, SC GLA: 166,192 SF , 6,000 SF Remaining Harris Teeter Anchored Shopping Center 17. www.CharlestonCommercialMarketForecast.com CHARLESTON RETAIL BROKERS Tim Metzler Retail Properties Joe Keenan - Palmetto Properties Robert Pratt Robert Pratt & Co. Trey Lucy - Lucy Belk Jay Chambers The Chambers Group Rox Pollard - Colliers Columbia Mark Erickson-Thalhiemer George Wilson/Scott Adams Adams & Wilson Joyce Beach C.B.R.E. Marcus Kastenholtz C.B.R.E. A Special Thank You to Our Cooperating Retail Brokers! 18. www.CharlestonCommercialMarketForecast.com Commercial Real Estate Market Forecast October 8, 2014 | Daniel Island Club 19. www.CharlestonCommercialMarketForecast.com NFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALM ARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIER ONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GRO GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS NFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALM ARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIER ONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GRO GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS NFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALM ARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIER ONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GRO GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS NFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALM ARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIER ONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GRO GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS NFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALM ARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIER ONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GRO GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALMETTO PARKWAY CORRIDOR SUBMARKETS NFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIERS PORT NEW CONSTRUCTION PALM ARKWAY CORRIDOR SUBMARKETS INFRASTRUCTURE POPULATION GROWTH GEOGRAPHIC BARRIER 20. www.CharlestonCommercialMarketForecast.com Residential Land Kevin Wadley Vice President of Land Acquisition Ashton Woods kwadley@ashtonwoodshomes.com www.ashtonwoodshomes.com 843.514.0561 21. www.CharlestonCommercialMarketForecast.com Charleston is Winning! #1 Top City in the U.S. and Canada Travel + Leisure 2014 Worlds Best Awards #1 Friendliest City in the United States Cond Nast Traveler 2014 Readers Choice Awards #2 Top City in the World Travel + Leisure 2014 Worlds Best Awards Americas Most Attractive People Travel + Leisure Magazine Source: Google 22. www.CharlestonCommercialMarketForecast.com Population Source: Census, TAMU +11%IN LAST 5 YEARS 23. www.CharlestonCommercialMarketForecast.com Annual Permits ( Single Family) Source: Real Estate Information Service 0 2,000 4,000 6,000 8,000 10,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 PERMITS CONTINUE TO EXCEED CLOSINGS 24. www.CharlestonCommercialMarketForecast.com Annual New Home Closings Source: Real Estate Information Service 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014 LEVELS +50% 0VER 2011 25. www.CharlestonCommercialMarketForecast.com New Home Closings by Quarter 0 100 200 300 400 500 600 700 800 900 Q1 2011Q2 2011Q3 2011Q4 2011Q1 2012Q2 2012Q3 2012Q4 2012Q1 2013Q2 2013Q3 2013Q4 2013Q1 2014Q2 2014 New Home Closings by Quarter +800 UNITS IN Q3 2014 26. www.CharlestonCommercialMarketForecast.com Homes Sales in the Tri-County Source: CTARMLS No. of Sales Ave. Sold Price Ave. Sold Price/SF Jan-Aug 2013 Total 8725 $284,755 $133.65 New 1736 $288,679 $122.76 Resales 6989 $283,707 $136.36 Jan-Aug 2014 Total 9237 $301,935 $159.56 New 1872 $309,727 $221.59 Resales 7365 $299,784 $143.74 YOY Change in Total 5.9% 6.0% 19.4% 27. www.CharlestonCommercialMarketForecast.com Header Source: Real Estate Information Service Single Family 98% Multi-Family 2% New Home Construction Type Charleston is primarily a single family market 28. www.CharlestonCommercialMarketForecast.com Months Supply Source: Real Estate Information Service 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Months Supply 29. www.CharlestonCommercialMarketForecast.com Submarkets 30. www.CharlestonCommercialMarketForecast.com Top Performing Communities Source: Real Estate Information Service Rank Subdivision Market Area Closings Average Price 1 CANE BAY PLTN CARNES/CANE BAY 178 250,693 2 CAROLINA BAY WEST ASHLEY 99 288,844 3 CAROLINA PARK MT PLEASANT 51 496,791 4 SOPHIA LANDING GOOSE CREEK 35 209,146 5 DANIEL ISLAND DANIEL ISLAND 33 687,545 6 THE PONDS KNIGHTSVILLE 33 338,708 7 TANNER PLTN HANAHAN 32 328,294 8 OAK TERRACE PRESERVE NORTH CHARLESTON 29 210,619 9 SPRING GROVE PLTN GOOSE CREEK 27 190,340 10 BAKER PLTN LADSON/LINCOLNVILLE 25 183,528 11 FOXBANK PLTN CARNES/CANE BAY 25 241,091 12 DUNES WEST DUNES WEST 24 396,268 13 LAKES OF SUMMERVILLE LADSON/LINCOLNVILLE 24 154,889 14 SIX FIFTY SIX CONDOS MT PLEASANT 24 387,825 15 WHITE GABLES KNIGHTSVILLE 23 222,991 16 BOLTONS LANDING WEST ASHLEY 22 245,871 17 FELDER CREEK CARNES/CANE BAY 21 196,254 18 BROOKDALE NORTH CHARLESTON 20 196,370 19 NELLIEFIELD PLTN NELLIEFIELD 20 257,885 20 FENWICK HALL JOHNS ISLAND 19 187,573 31. www.CharlestonCommercialMarketForecast.com Source: Real Estate Information Service 0 100 200 300 400 500 600 700 800 New Home Closings by Market Area 1/1/2013 - 6/30/2014 32. www.CharlestonCommercialMarketForecast.com Johns/Wadmalaw Island Kiawah/seabrook James Island Edisto Island Edisto Island Ladso n West Ashley Ashley River Road Awendaw/McClellanville N Charleston Daniel Island Hanahan Oakbroo k Mt Pleasant/Islands Givhans Knightsvill e Summervill e Carnes/Cane Bay Goose Creek Peninsul a New Home Price By Market Area 2014 Source: Real Estate Information Service 33. www.CharlestonCommercialMarketForecast.com New Home Average Price by Market Area Source: Real Estate Information Service $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 2013 2014 Charleston Berkeley Dorchester $313,146 $258,827 $286,834 $267,791 $255,036 $233,676 34. www.CharlestonCommercialMarketForecast.com New Construction Activity Source: Real Estate Information Service 35. www.CharlestonCommercialMarketForecast.com Source: Real Estate Information Service 0 100 200 300 400 500 600 700 800 06/11 12/11 06/12 12/12 6/13 12/13 6/14 Single Family Lot Closings Ber Chs Dor 36. www.CharlestonCommercialMarketForecast.com Mt Pleasant, Entitled Lots Source: Valbridge Average Land Purchase Price Ranges per entitled lot 2010 - 2012 $20,000 - $30,000 2013 $25,000 - $50,000 2014 $45,000 - $80,000 Over 200% increase in price range 37. www.CharlestonCommercialMarketForecast.com Whats next ? 38. www.CharlestonCommercialMarketForecast.com More builders and more new homes! 39. www.CharlestonCommercialMarketForecast.com Cane Bay Lakes over 4,000 homes Carnes Crossroads over 4,000 homes Nexton over 10,000 homes The Ponds over 1,500 Limehouse Village- over 500 homes Summers Corner approximated over 4,000 homes Grand Oaks Grand Bees over 500 units Fenwick Hills over 150 units Stono View over 160 units Maybank Village over 175 units New Construction Planned to start 2014 40. www.CharlestonCommercialMarketForecast.com Challenges? Downward pricing pressure with increased supply of new homes. Builders still have a shortage of supply in highly desirable areas, but inventories are larger in other areas. Expect entitlements to take longer. Infrastructure needs to catch up with some areas to support growth. 41. www.CharlestonCommercialMarketForecast.com AND POPULATION GROWTH RENTAL RATES VACANCY CHARLESTON BUSINESS DISTRICT OSPACE SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION DE ULATION GROWTH RENTAL RATES VACANCY INTERNET BRICKS AND MORTAR SALES ACTIVI MARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION DEMAND POPULATION GROWT TAL RATES VACANCY INTERNET BRICKS AND MORTAR SALES ACTIVITY SUBMARKETS LEASE NSION NEW CONSTRUCTION DEMAND POPULATION GROWTH RENTAL RATES VACANCY RNET BRICKS AND MORTAR SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW STRUCTION DEMAND POPULATION GROWTH RENTAL RATES VACANCY INTERNET BRICKS A RTAR SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION DEMA ULATION GROWTH RENTAL RATES VACANCY INTERNET BRICKS AND MORTAR SALES ACTIVI MARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION DEMAND POPULATION GROWT TAL RATES VACANCY INTERNET BRICKS AND MORTAR SALES ACTIVITY SUBMARKETS LEASE NSION NEW CONSTRUCTION DEMAND POPULATION GROWTH RENTAL RATES VACANCY RNET BRICKS AND MORTAR SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW STRUCTION DEMAND POPULATION GROWTH RENTAL RATES VACANCY INTERNET BRICKS A RTAR SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION DEMA ULATION GROWTH RENTAL RATES VACANCY INTERNET BRICKS AND MORTAR SALES ACTIVI MARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION DEMAND POPULATION GROWTH S VACANCY INTERNET BRICKS AND MORTAR SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION STRUCTION DEMAND POPULATION GROWTH RENTAL RATES VACANCY INTERNET BRICKS AND MORT 42. www.CharlestonCommercialMarketForecast.com Margaret H. Brockinton, President Kaitland McCutcheon, Leasing, B.I.C. 843.266.7990 Margaret@carolinaretailproperty.com Kaitland@carolinaretailproperty.com 43. www.CharlestonCommercialMarketForecast.com RETAIL SUBMARKETS Development Project Approx. Retail SF Estimated Delivery Midtown- Downtown 16,000 SF 2015 The Corner at Wescott- N. Charleston 162,000 SF 2014 Nexton- Summerville 125,000 SF 2014 Fmr. K-Mart, Redevelopment- Mt. Pleasant 131,000 SF 2015 The Folly Market- South Islands 45,000 SF 2014 Oyster Park- Mt. Pleasant 34,600 SF 2015 44. www.CharlestonCommercialMarketForecast.com LOCAL RETAIL MARKET Decreased Vacancies Increase in Rental Rates Longer Term Leases 45. www.CharlestonCommercialMarketForecast.com RETAIL MARKET FORECAST Impact of Boeing Expansion The Boeing Co. has confirmed its lease of 100,000 square feet of office and lab space for a new Boeing Research & Technology Center in Crosspoint at Palmetto Commerce Park in North Charleston. 320 Acres for Expansion of Final Assembly Campus The most exciting land-use development in the Charleston market is occurring just north of Boeings airport development on a parcel known locally as Palmetto Commerce Park. -Crosspoint is currently owned by a joint venture between Jamestown Properties and Childress Klein Properties. 305 acres in North Charleston, located between I-26 and Highway 78. 8 miles from Boeings North Charleston 787 Final Assembly plant and only 9 miles from I-526 The subsequent selection by the Boeing Interiors team to locate their new facility in Palmetto Commerce Park further cements Crosspoint as a key location for future manufacturing and supplier opportunities.Source: www.crosspointcharleston.com 46. www.CharlestonCommercialMarketForecast.com THE CORNER AT WESCOTT Wescott Blvd & Dorchester Road, North Charleston, SC GLA: 166,192 SF, 6,000 SF Remaining Harris Teeter Anchored Shopping Center 47. www.CharlestonCommercialMarketForecast.com Boeing Expansion The Corner at Wescott 48. www.CharlestonCommercialMarketForecast.com Source www.nextonsc.com NEXTON Summerville, SC 49. www.CharlestonCommercialMarketForecast.com MOUNT PLEASANT SQUARE/OYSTER PARK Ben Sawyer Blvd & Rifle Range Road, Mount Pleasant GLA of Existing Shopping Center: 106,610 SF GLA of Expansion Oyster Park: 288,282 SF Includes: 254 Class A Luxury Multi-Family Units 33,803 SF Retail/Commercial Space Parking Deck 50. www.CharlestonCommercialMarketForecast.com KING STREET COMMERCIAL GROWTH 556 King Street Midtown 37,000 SF+ commercial space Dual-branded Hyatt House and Hyatt Place hotel 7-story parking garage 370 & 372 King Street Renovation 404 King Street 10 Story, 180 Room Hotel The Post & Courier Property Approx. 12 Acre Mixed Use 320,400 SF retail 509,800 SF office/ hospitality 456,300 SF residential 51. www.CharlestonCommercialMarketForecast.com RETAIL MARKET FORECAST Walmart Neighborhood Market Expanding in SC The Neighborhood Market, typically the size of Wal-Mart Supercenter, sells traditional store goods with expanded selection of grocery items and prepared foods. New Locations Include: Greenville Myrtle Beach Greer 52. www.CharlestonCommercialMarketForecast.com LOOKING FORWARD 53. www.CharlestonCommercialMarketForecast.com CHARLESTON RETAIL BROKERS A Special Thank You to Our Cooperating Retail Brokers! Tim Metzler Retail Properties Joe Keenan - Palmetto Properties Robert Pratt Robert Pratt & Co. Trey Lucy - Lucy Belk Jay Chambers The Chambers Group Rox Pollard - Colliers Columbia Mark Erickson-Thalhiemer George Wilson/Scott Adams Adams & Wilson Joyce Beach C.B.R.E. Marcus Kastenholtz C.B.R.E. Colliers Columbia 54. www.CharlestonCommercialMarketForecast.com DEMAND POPULATION GROWTH RENTAL RATES VACANCY INTERNET SALES LAND AVAILAB SUBMARKETS LEASE CORPORATE PARK EXPANSION NEW CONSTRUCTION DEMAND HIGHW ACCESS GROWTH RENTAL RATES VACANCY INTERNET ABUNDANT PARKING SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION DEMAND POPULATION GRO RENTAL RATES DEMAND POPULATION GROWTH RENTAL RATES VACANCY INTERNET SALES AVAILABILITY SUBMARKETS LEASE CORPORATE PARK EXPANSION NEW CONSTRUCTION D HIGHWAY ACCESS GROWTH RENTAL RATES VACANCY INTERNET ABUNDANT PARKING SALE SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION DEMAND POPULATION GRO RENTAL RATES DEMAND POPULATION GROWTH RENTAL RATES VACANCY INTERNET SALES LAND A SUBMARKETS LEASE CORPORATE PARK EXPANSION NEW CONSTRUCTION DEMAND HIGHWAY ACCES RENTAL RATES VACANCY INTERNET ABUNDANT PARKING SALES ACTIVITY SUBMARKETS LEASE TERM EXPANSION NEW CONSTRUCTION DEMAND POPULATION GROWTH RENTAL RATES DEMAND POPUL GROWTH RENTAL RATES VACANCY INTERNET SALES LAND AVAILABILITY SUBMARKETS LEASE CORPO EXPANSION NEW CONSTRUCTION DEMAND HIGHWAY ACCESS GROWTH RENTAL RATES VACANCY IN ABUNDANT PARKING SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION POPULATION GROWTH RENTAL RATES DEMAND POPULATION GROWTH RENTAL RATES VACANCY INT SALES LAND AVAILABILITY SUBMARKETS LEASE CORPORATE PARK EXPANSION NEW CONSTRUCTION HIGHWAY ACCESS GROWTH RENTAL RATES VACANCY INTERNET ABUNDANT PARKING SALES ACTIVIT SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION DEMAND POPULATION GROWTH REN DEMAND POPULATION GROWTH RENTAL RATES VACANCY INTERNET SALES LAND AVAILABILITY SUB LEASE CORPORATE PARK EXPANSION NEW CONSTRUCTION DEMAND 55. www.CharlestonCommercialMarketForecast.com Office Market Forecast & Outlook 2014 Terry Ansley, CPM Broker in Charge 843.884.8166/tansley@landmark-enterprises.com 56. www.CharlestonCommercialMarketForecast.com Inventory SF Total 26,283,435 Class A 4,927,822 Class B 13,571,560 Class C 7,784,053 Rate Overall $17.44 Class A $24.66 Class B $17.28 Class C $ 9.67 Range Class A $22 - $37 Class B $15 - $21 Class C $9 - $14 Vacancy Overall 7.9% Class A 8.9% Class B 8.9% Class C 5.4% 57. www.CharlestonCommercialMarketForecast.com Charleston Submarket 58. www.CharlestonCommercialMarketForecast.com Active Areas: Downtown Drivers: Courthouse Financial District Historic District High Profile 607 Meeting Street 174 Meeting Street Cigar Factory 59. www.CharlestonCommercialMarketForecast.com Active Areas: East Cooper Drivers: Land Availability Highway Access Executive Residence Abundant Parking Less Congestion Gateway Mount Pleasant Central Island Plaza BenefitFocus 60. www.CharlestonCommercialMarketForecast.com Active Areas: North Charleston Drivers: Central Location Aerospace Corporate Park Retail Amenity Base Faber Plaza CTAR College of Charleston 61. www.CharlestonCommercialMarketForecast.com Active Areas: Summerville Drivers: Land Availability Population Growth New I-26 Interchange MeadWestvaco MWV SCRA 62. www.CharlestonCommercialMarketForecast.com Horizon Outer Ring New Construction Gateways Cycle Sites Carnes Crossroads Infill New Construction Gateways 63. www.CharlestonCommercialMarketForecast.com Horizon Forecast: Growth Inventory Rates Firming Up Positive Absorption Static Vacancy Market Challenges: Preleasing vs. Speculative Lending Requirements Land Values/ Building Cost Increases Delivery at Market Rate 64. www.CharlestonCommercialMarketForecast.com Let the Good Times Roll. 65. www.CharlestonCommercialMarketForecast.com DEMAND POPULATION GROWTH RENTAL RATES VACANCY AEROSPACE DATA CONSOLIDATI ACTIVITY SUBMARKETS LEASE TERMS EXPANSION SPEC CONSTRUCTION DEMAND POPUL GROWTH DISTRIBUTION VACANCY INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY SUB LEASE TERMS EXPANSION NEW CONSTRUCTION JEDBURG DEMAND POPULATION GROWT RATES VACANCY AEROSPACE DATA CONSOLIDATION SALES ACTIVITY SUBMARKETS LEASE EXPANSION SPEC CONSTRUCTION DEMAND POPULATION GROWTH DISTRIBUTION VACAN INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSIO CONSTRUCTION JEDBURG DEMAND POPULATION GROWTH RENTAL RATES VACANCY AEROSPACE CONSOLIDATION SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION SPEC CONSTRUCTION DEM POPULATION GROWTH DISTRIBUTION VACANCY INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY LEASE TERMS EXPANSION NEW CONSTRUCTION JEDBURG DEMAND POPULATION GROWTH RENTAL VACANCY AEROSPACE DATA CONSOLIDATION SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSIO CONSTRUCTION DEMAND POPULATION GROWTH DISTRIBUTION VACANCY INTERSTATE ACCESS TECH SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION JEDBURG DEMAND P GROWTH RENTAL RATES VACANCY AEROSPACE DATA CONSOLIDATION SALES ACTIVITY SUBMARKETS TERMS EXPANSION SPEC CONSTRUCTION DEMAND POPULATION GROWTH DISTRIBUTION VACANCY ACCESS TECHNOLOGY SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTIO DEMAND POPULATION GROWTH RENTAL RATES VACANCY AEROSPACE DATA CONSOLIDATION SALES SUBMARKETS LEASE TERMS EXPANSION SPEC CONSTRUCTION DEMAND POPULATION GROWTH DIS VACANCY INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSIO CONSTRUCTION JEDBURG DEMAND POPULATION GROWTH 66. www.CharlestonCommercialMarketForecast.com Tri-County Industrial Market The Tipping Point: Are We There Yet? Alan A. Bolduc, CCIM, SIOR Senior Vice President Industrial & Investment Services alan.Bolduc@avisonyoung.com T 843.860.9566 67. www.CharlestonCommercialMarketForecast.com Local Industrial Brokerage firms and CoStar unifying the market, submarket and market data reporting. 68. www.CharlestonCommercialMarketForecast.com 69. www.CharlestonCommercialMarketForecast.com Sales Graphs on market data and trending National Cycle Lease 70. www.CharlestonCommercialMarketForecast.com South Carolina? 71. www.CharlestonCommercialMarketForecast.com 0 10,000,000 20,000,000 30,000,000 40,000,000 50,000,000 60,000,000 2012 YE 2013 YE 2014 YTD 2015 F 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 2012 YE 2013 YE 2014 YTD 2015 F $3.50 $4.00 $4.50 $5.00 $5.50 $6.00 $6.50 $7.00 2012 YE 2013 YE 2014 YTD 2015 F 10 30 50 70 90 110 130 150 170 2012 YE2013 YE 2014 YTD RBA SF Vacancy Rate Average Asking Rent (NNN) Lease Transactions (Original & Sublet) 72. www.CharlestonCommercialMarketForecast.com $30.00 $40.00 $50.00 $60.00 $70.00 2012 YE 2013 YE 2014 YTD 0 10 20 30 40 50 2012 YE 2013 YE 2014 YTD Sold Transactions Median $/SF 73. www.CharlestonCommercialMarketForecast.com Aerospace 466 Companies 74% 5 employees or less Rail/Transloading Demand is Escalating Refrigerated/Frozen Pent up Demand (expanding from 50k SF to 550k SF in 2015) Tipping Points 74. www.CharlestonCommercialMarketForecast.com 75. www.CharlestonCommercialMarketForecast.com 76. www.CharlestonCommercialMarketForecast.com 77. www.CharlestonCommercialMarketForecast.com Reducing the Impediments to the Market Roads (In Process) Clements Ferry Rd widening 4 lanes to Jack Primus Rd Sheeps Island Interchange and Frontage Rds Palmetto Commerce Pky Phase 3 Extension Palmetto Commerce Pky, new 1-26 Interchange New Airport Entrance and I-526/Montague redesign 78. www.CharlestonCommercialMarketForecast.com Clements Ferry Rd widening 4 lanes 79. www.CharlestonCommercialMarketForecast.com Sheeps Island Interchange and Frontage Roads 80. www.CharlestonCommercialMarketForecast.com Palmetto Commerce Pky Phase 3 Extension 81. www.CharlestonCommercialMarketForecast.com Palmetto Commerce Pky I-26 Interchange 82. www.CharlestonCommercialMarketForecast.com New Airport Entrance 1-526/Montague 83. www.CharlestonCommercialMarketForecast.com Reducing the Impediments to the Market New Construction 350k SF Class A Flex? 274k SF 140k SF 84. www.CharlestonCommercialMarketForecast.com Crosspoint 85. www.CharlestonCommercialMarketForecast.com Pattillo 86. www.CharlestonCommercialMarketForecast.com MWV 87. www.CharlestonCommercialMarketForecast.com Flex 88. www.CharlestonCommercialMarketForecast.com Next Year: Still BETTER? More Port expansion investment and increased activity More Boeing and Aerospace expansions in the market New Class A buildings delivered More activity further west on 1-26 to Jedburg and beyond Increasing rents and longer leases Renovations of Class C properties? 89. www.CharlestonCommercialMarketForecast.com AND POPULATION GROWTH CORPORATE RATES OCCUPANCY INTERNET NON-STOP FLIGHT NE TOUR OPERATORS CONVENTION AND VISITORS BUREAU SPOLETO NEW HOTELS DEMA ULATION ROOM RATES INTERNET PUBLIC RELATIONS SOUTHERN CHARM BEACH HISTORIC RICT NORTH CHARLESTON SUMMERVILLE DEMAND POPULATION GROWTH RENTAL RATES NCY INTERNET MT. PLEASANT CULTURE DEMAND POPULATION GROWTH CORPORATE RAT UPANCY INTERNET NON-STOP FLIGHTS CUISINE TOUR OPERATORS CONVENTION AND VISIT AU SPOLETO NEW HOTELS DEMAND POPULATION ROOM RATES INTERNET PUBLIC RELATI HERN CHARM BEACH HISTORIC DISTRICT NORTH CHARLESTON SUMMERVILLE DEMAND ULATION GROWTH RENTAL RATES VACANCY INTERNET MT. PLEASANT CULTURE POPULATIO WTH CORPORATE RATES OCCUPANCY INTERNET NON-STOP FLIGHTS CUISINE TOUR OPERAT VENTION AND VISITORS BUREAU SPOLETO NEW HOTELS DEMAND POPULATION ROOM RA RNET PUBLIC RELATIONS SOUTHERN CHARM BEACH HISTORIC DISTRICT NORTH CHARLESTO MERVILLE DEMAND POPULATION GROWTH RENTAL RATES VACANCY INTERNET MT. PLEAS URE DEMAND POPULATION GROWTH CORPORATE RATES OCCUPANCY INTERNET NON-STO HTS CUISINE TOUR OPERATORS CONVENTION AND VISITORS BUREAU SPOLETO NEW HOTE AND POPULATION ROOM RATES INTERNET PUBLIC RELATIONS SOUTHERN CHARM BEACH ORIC DISTRICT NORTH CHARLESTON SUMMERVILLE DEMAND POPULATION GROWTH RENT S VACANCY INTERNET MT. PLEASANT CULTURE DEMAND POPULATION GROWTH CORPORA S OCCUPANCY INTERNET NON-STOP FLIGHTS CUISINE TOUR OPERATORS CONVENTION AN ORS BUREAU SPOLETO NEW HOTELS DEMAND POPULATION ROOM RATES INTERNET PUBL 90. www.CharlestonCommercialMarketForecast.com Hospitality & Tourism Update Michael Tall President & COO mtall@charlestownehotels.com (843) 422.3851 91. www.CharlestonCommercialMarketForecast.com #1 Destination in the World Travel + Leisure (2013 & 2014) #1 City in the World Conde Nast Traveler (2012, 2013 & 2014) Numerous Mentions in Highly Acclaimed Publications 92. www.CharlestonCommercialMarketForecast.com YOY Occupancy Growth 2011 2012 2013 (YTD) 2014 Charleston 1.4% 0.8% 2.1% 4.2% United States 4.4% 2.5% 1.5% 3.4% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 93. www.CharlestonCommercialMarketForecast.com YOY ADR Growth 2011 2012 2013 (YTD) 2014 Charleston 3.4% 6.0% 4.1% 6.2% United States 3.7% 4.2% 3.9% 4.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 94. www.CharlestonCommercialMarketForecast.com Year-Over-Year RevPAR Growth 2011 2012 2013 (YTD) 2014 Charleston 5.0% 7.4% 6.0% 10.4% United States 8.2% 6.8% 5.4% 7.8% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 95. www.CharlestonCommercialMarketForecast.com Average Tourist Expenditures Accommodations $103 Dining/Food $58 Local Transportation $38 Tours/Attractions $37 Shopping $46 Other $18 $227 Per Visitor Per Day 96. www.CharlestonCommercialMarketForecast.com New Supply Entering the Market 97. www.CharlestonCommercialMarketForecast.com New Inventory - Peninsula Expected Completion 2015 Calhoun Hotel 50 Rooms Grand Bohemian 50 Rooms Hyatt House 113 Rooms Hyatt Place 191 Rooms King Hotel 54 Rooms Restoration on King Hotel 36 Rooms The Spectator Hotel 41 Rooms Expected Completion 2016 Hotel Dewberry 155 Rooms Hotel (Marion Square) 185 Rooms Hotel (Meeting/Reid Streets) 138 Rooms Expected Completion 2017 Aloft/Element Hotel - 174 98. www.CharlestonCommercialMarketForecast.com New Inventory - Charleston Area Expected Completion 2014 Hilton Garden Inn 130 Marriott Courtyard 93 Rooms Expected Completion 2015 Marriott Residence Inn TBA Expected Completion 2016 The Dorchester Hotel 66 Rooms Hotel Use (TBA) Hampton Inn Crosstown Area Hotel at SC Aquarium Calhoun Street Holiday Inn Express IOP Connector Hotel Use - Patriots Point Hotel Use - Calhoun & Meeting 99. www.CharlestonCommercialMarketForecast.com Forecast 2014 2015 Charleston Peninsula Occupancy 80.5% 80.1% ADR $188.72 $194.17 Charleston County Occupancy 74.5% 74.7% ADR $136.66 $143.49 100. www.CharlestonCommercialMarketForecast.com Michael Tall President & COO mtall@charlestownehotels.com (843) 422.3851 101. www.CharlestonCommercialMarketForecast.com Commercial Real Estate Market Forecast October 8, 2014 | Daniel Island Club 102. www.CharlestonCommercialMarketForecast.com QUESTIONS? 103. www.CharlestonCommercialMarketForecast.com THANK YOU TO OUR HOST SPONSOR 104. www.CharlestonCommercialMarketForecast.com 105. www.CharlestonCommercialMarketForecast.com 106. www.CharlestonCommercialMarketForecast.com