Vacancy Rates OVeR cOmpletiOns and absORptiOns

6.0

7.0

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

Q211

Q311

Q411

Q112

Q212

Q312

Q412

Q113

(2,000,000)

(1,500,000)

(1,000,000)

(500,000)

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

Completions Absorptions Total Market Vacancy Rate

IndustrIal trends reportGReateR cOlumbus ReGiOn

www.colliers.com/columbus

Market Flourishing, Despite Slow Start industRial maRket OVeRViewthe Columbus industrial market recorded its eighth consecutive quarter of positive absorption, as 213,265 square feet were absorbed this quarter. the vacancy rate now stands at 7.7 percent. Construction continues to be strong as 1.3 million square feet of warehouse distribution space is underway. southgate Corp. finished construction on its speculative 50,000 square foot spec manufacturing building at 94 Integrity drive. significant leases were signed by Hd supply at 6200 Commerce Center drive for 437,256 square feet, and s B Capital at 4851 Groveport rd. for 132,100 square feet. sears, roebuck and Co. renewed 358,760 square feet of warehouse distribution space at 5765 Green pointe drive. agellan Commercial reIt purchased 3671-3699 Interchange road (91,200 square feet) and 3949 Business park drive (74,558 square feet) from premier Courier Inc. for $7.7 million ($46 per square foot).

FORecasts and ReFlectiOn• Ktr Capital partners, a private equity firm that has completed nearly $2 billion of acquisitions and

development since 2004, recently sold two warehouses in its portfolio to Welsh property trust. Creekside XII, a 737,471 square foot warehouse distribution building, located at 3051 Creekside parkway, sold for $24.5 million ($33 per square foot). air east I, a 754,000 square foot warehouse property located at 6766 pontius road sold for $22.5 million ($30 per square foot).

• navarre announced it will expand its operations in ohio by 500,000 square feet. navarre selected a site at 175 Heritage drive, located in the prologis park 70 etna complex in licking County. Hemmer Construction will begin construction on this 766,633 square foot warehouse build-to-suit in the second quarter, and should be completed by the end of the year. as a result of the improved economy and increased demand for bulk warehouse/distribution space, future build-to-suit and speculative construction will be a big storyline for the Columbus industrial market in 2013.

Rental Rates

asking rental rates have remained stable during the beginning of 2013. a slight uptick in warehouse/distribution rates, and modest increases in general industrial rates can be attributed to falling vacancy rates. there are now just 21 spaces of 20,000 square feet or greater available in r&d/Flex throughout Greater Columbus, causing r&d/Flex rental rates to significantly increase over the past year as leasing remains strong. overall, concessions continue to decrease as larger distribution centers are in short supply.

maRket indicatORs

weiGhted aVeRaGe Rental RatesRates for the major product types

Q1

2013*

Q2

2013**

Vacancy

net absORptiOn

cOnstRuctiOn

Rental Rates — *actual change from previous quarter

**projected change from previous quarter

Q1 2013 | IndustrIal

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

Q308

Q408

Q109

Q209

Q309

Q409

Q110

Q210

Q310

Q410

Q111

Q211

Q311

Q411

Q112

Q212

Q312

Q412

Q113

General Industrial R&D/Flex Warehouse/Dist.

ReGiOnal industRial ecOnOmicsthe Federal reserve Bank of Cleveland reports at least once a quarter in the Federal reserve’s Beige Book about the economic activity of the fourth district, which includes the Columbus Metropolitan statistical area (Msa). at the beginning of March, the Beige Book reported that economic activity had grown at a modest pace. Manufacturers reported that production output and new orders were steady or up slightly during the past quarter. Inventories are aligned with demand.Capacity utilization rose slightly for steel producers; other factories reported that rates were slightly below their normal range.

Many reports on freight volume indicated that the volume exceeded projections made late last year. the industries driving transport demand are automotive, construction, and shale gas. shale gas activity expanded at a robust pace. little change was seen in conventional oil and natural gas production, but drilling is expected to pick up this spring and summer.

nonresidential builders described current business conditions as slowing compared to the fourth quarter of last year. the stress of the fiscal cliff on government budgets has choked the supply of projects. Contractors are reporting substantially higher prices for building

materials. projects receiving the strongest inquiries are in the industrial manufacturing and distribution, education, healthcare, and multi-family development. demand for commercial loans and refinancings have slowed, but many investors continue to take advantage of low interest rates that appear to be disappearing sooner than later.

emplOymentohio was ranked third in the country after gaining 50,000 manufacturing jobs from 2009 through december 2012 according to the u.s. Bureau of labor statistics. However, the Central ohio region reported manufacturing employment of 65,200 employees in February which was a decrease of nearly 500 employees from the past quarter. over the last 12 months, the hottest manufacturing sectors for jobs were transportation equipment, food manufacturing, and plastics and polymers. trade, transportation and utilities employment declined by 3,500 employees in February since december 2012. over the past year the industry has effectively seen a decrease of 1,500 employees, with a 70 basis point employment downturn. Mining, logging and construction decreased by 2,600 employees in February since december 2012, an overall 300 employee decrease over the past year.

the Columbus industrial market consists of 10 suburban submarkets and the Central Business district. the total inventory for the region is 212 million square feet of space.

maRket actiVity

sales actiVity

pROpeRty addRess sales date sale pRice size sF GRantOR GRantee pRice / sF type submaRket

6766 pontius road 1/25/2013 $22,450,000 754,000 Ktr Capital partners Welsh property trust $29.77 Warehouse southeast

3051 Creekside parkway 1/25/2013 $24,500,000 737,354 Ktr Capital partners Welsh property trust $33.22 Warehouse southeast

6999-7029 Huntley road 2/5/2013 $5,000,000 184,187 north development Group CW Capital asset Management $27.13 Flex/r&d north

3671 Interchange road 1/25/2013 $4,200,000 91,200 premier Courier Inc agellan Capital $46.00 Flex/r&d West

3949 Business park drive 1/25/2013 $3,500,000 74,558 premier Courier Inc agellan Capital $46.00 Flex/r&d West

1341 norton avenue 3/7/2013 $1,300,000 56,860 1341 norton ltd llC Grandview 1341 llC $22.86 light Industrial West

16710 square drive 1/29/2013 $1,000,000 53,464 CrJ Investments llC rY-1 llC $18.70 Flex/r&d union

2222 south third street 3/6/2013 $1,000,000 53,006 schuler Inc QpI property Holdings llC $18.86 light Industrial souteast

985-999 Goodale Boulevard 3/18/2013 $1,475,000 40,834 999 Goodale llC ogstutz daimler llC $36.12 Flex/r&d West

5075 Krieger Court 1/11/2013 $1,840,000 24,664 Vitran express Inc Vitran ohio llC $74.60 light Industrial southwest

Union County

Delaware County

Licking County

North

East

CBD

West

Southwest Southeast

Fairfield County

Pickaway County

Madison County

lease aCtIVItY

pROpeRty addRess lease date lease sF lessee askinG pRice (nnn) type submaRket

6200 Commerce Center drive 3/20/2013 437,256 Hd supply $3.25 Warehouse-distribution southeast

4851 Groveport road 3/13/2013 132,100 s B Capital $1.75 Warehouse-distribution southeast

3000 Charter street 1/1/2013 124,115 Ball Corporation $1.35 Bulk Warehouse West

3515-3595 urbancrest Industrial drive 2/28/2013 63,041 aY Manufacturing $3.75 Warehouse-distribution southwest

2221-2302 John Glenn avenue 2/1/2013 58,056 Faro logistics $2.50 Warehouse-distribution southeast

3024 Charter street 1/1/2013 45,000 newark Group $2.55 Bulk Warehouse West

5650 Green pointe drive 3/4/2013 45,000 Crown Cork & seal $3.25 Bulk Warehouse southeast

1736 Westbelt drive 1/4/2013 30,024 General Wholesalers $2.80 Warehouse-distribution West

2200 International street 3/1/2013 20,800 laird plastics $3.25 light Industrial West

p. 2 | cOllieRs inteRnatiOnal

research & forecast report | Q1 2013 | industrial | Greater Columbus reGion

cOnstRuctiOn

Team Gemini LLC, a developer based in Orlando, announced it will build a receiving center at a new landfill entry off London Groveport Road to sort reusable and recyclable material from incoming loads of garbage. They will become the anchor tenant in what will become a 340-acre industrial park across the road, to be named Gemini Synergy Center. The $300 million project would create over 300 jobs.

update market comparisons

industRial maRket

net absorption construction asking Rental Rates

submaRket total sF Vacant sF Vacancy % current Quarter year-to-date current completions wh/dist R&d/Flex

CBd 5,335,716 405,386 7.6% 4,884 4,884 - $6.63

east 20,442,133 2,009,044 9.8% (244,531) (244,531) - $2.56 $5.27

FaIrFIeld 6,114,387 66,755 1.1% (2,255) (2,255) - $4.00 $6.50

lICKInG 19,162,312 1,396,046 7.3% (50,000) (50,000) 50,000 $2.76

MadIson 9,026,748 - 0.0% - - 450,000

nortH 16,814,944 1,291,345 7.7% (15,114) (15,114) - $4.36 $4.72

nortH delaWare 8,796,109 553,466 6.3% 9,100 9,100 - $3.33 $7.00

pICKaWaY 3,602,146 93,756 2.6% (9,506) (9,506) -

soutHeast 64,163,813 7,237,271 11.3% 115,105 115,105 783,303 40,800 $2.79 $3.46

soutHWest 17,512,083 976,080 5.6% 19,628 19,628 - $2.90 $3.38

unIon 6,299,770 333,916 5.3% 73,664 73,664 - $6.46

West 34,873,110 2,094,230 6.0% 312,290 312,290 - $2.40 $4.27

totals 212,366,316 16,457,295 7.7% 213,265 213,265 1,233,303 90,800 $2.76 $4.83

net absorption construction asking Rental Rates

pROpeRty type total sF Vacant sF Vacancy % current Quarter year-to-date current completions by product typer&d/FleX 20,209,273 2,552,433 12.6% 34,103 34,103 20,800 $4.83

General IndustrIal 70,071,075 3,491,356 5.0% (166,074) (166,074) 70,000 $3.22

WareHouse/

dIstrIButIon

122,085,968 10,413,506 8.5% 345,236 345,236 1,233,303 $2.76

totals 212,366,316 16,457,295 7.7% 213,265 213,265 1,233,303 90,800 $2.92

QuaRteRly cOmpaRisOn and tOtals

net absorption construction asking Rental Rates

QuaRteR, yeaR total sF Vacant sF Vacancy % current Quarter year-to-date current completions ($)Q4, 2012 211,821,516 16,517,649 7.8% 1,455,132 4,938,885 924,103 448,655 $2.99

Q3, 2012 211,027,622 19,227,318 9.1 757,254 3,461,253 1,259,655 - $2.87

Q2, 2012 213,192,579 21,359,885 10 1,430,866 2,703,999 425,000 900,000 $2.95

Q1, 2012 212,418,016 22,790,751 10.7 1,273,133 1,273,133 898,000 - $3.04

research & forecast report | Q1 2013 | industrial | Greater Columbus reGion

cOllieRs inteRnatiOnal | p. 3

centRal business distRictthe Central Business district (CBd) experienced relatively insignificant positive absorption of 4,884 square feet in the first quarter. an owner/user sale of a 15,000 square foot flex building at 106 east Moler st. kept the downtown submarket from experiencing negative absorption after a new 14,000 square foot vacancy at 1001 Kinnear road. absorption as a whole has been strong for eight consecutive quarters in the CBd, with just four spaces of 10,000 square feet vacant, two of which have more than 100,000 square feet available.

eastthe submarkets comprising eastern Columbus are east and licking County. the licking submarket recorded 50,000 square feet of negative absorption after southgate Corp. finished construction on its 50,000 square foot building at 94 Integrity drive. the spec manufacturing building has the ability to expand to 150,000 square feet, but further development on the site has not been announced. the east submarket stumbled in the first quarter as vacancy rates have increased 80 basis points to 9.8 percent. the submarket is still significantly better off than previous years when vacancy rates were lingering in the 20 percent range. Ball Corporation vacated 250,000 square feet of manufacturing space at 350 McCormick Boulevard, and relocated into 124,115 square feet of warehouse space at 3000 Charter st. in the West submarket.

nORththe submarkets comprising northern Columbus are north and north delaware. the north submarket recorded 15,114 square feet of negative absorption as avnet vacated 52,870 square feet of flex space at 7465 Worthington Galena rd., while air Waves downsized by 45,842 square feet in their flex space at 7787 Graphics Way. atlas Butler purchased a 48,412 square foot building at 4849 evanswood drive. the north delaware submarket recorded 9,100 square feet of positive absorption that can be attributed to Maco power leasing 9,100 square feet at 7708 Green Meadows drive.

sOutheastthe southeast drove the market for most of 2012, and the first quarter of 2013 is no different. after posting 115,105 square feet of positive absoprtion, the vacancy remains at 11.3 percent. Construction continues on the 305,250 square foot Fedex smartpost distribution facility, and the 478,053 square foot speculative distribution center on Centerpoint parkway. sears, roebuck and Company’s 358,760 square foot renewal at 5765 Green pointe drive is the highlight of the quarter. Kraft vacated 516,174 square feet of space at 2235 spiegel drive, but it was not enough to negatively impact

the absorption for the quarter as major leases were signed by Hd supply (437,256 square feet), s B Capital (132,1000 square feet), Faro logistics (58,056 square feet), and Crown Cork and seal (45,000 square feet). (See Lease Activity on Page 2).

sOuthwestthe southwest submarket experienced relatively insignificant positive absorption of 19,628 square feet, but still boasts an impressive 5.6 percent vacancy rate. aY Manufacturing signed 63,041 square feet of warehouse distribution space at 3515-3595 urbancrest Industrial drive.

westthe submarkets on the west side of Central ohio are West, Madison and union. the West submarket continues its impressive run after recording 312,290 square feet of positive absorption; which created an astonishing 100 basis point drop in vacancy to 6 percent. a 71,327 square foot renewal by Yazaki at 5353 Fisher road, and a 45,000 square foot lease by the newark Group at 3024 Charter st. offset 110,000 square feet of move outs by Monk Casket, all-state Belting Co., and Heidelberg. Madison County showed no leasing activity, and construction continues on the 450,000 square foot target distribution center.

maRket intelMarket activity Volume is the sum of the absolute value of each absorption change in the market. It tells us a little more about what exactly happened to the market behind the absorption number. the Market activity Volume was 3,032,817 square feet. this is slightly below the average (3,934,164 square feet) for first quarters in the past four years. there are only 47 buildings with vacant contiguous space equal to or greater than 100,000 square feet left in the Columbus market. nine were built since 2000 and eight of those are warehouse/distribution.

tenants in the maRketthe types of tenant seen most frequently are 40,000-70,000 square foot light warehouse and Flex/r&d users. demand from bulk warehouse and distribution users seeking more than 200,000 square feet is beginning to subside, but will continue to drive the market. auto suppliers, technology companies (e-commerce distributors, internet based retailers and third party logistic firms) are also active in the region. the biggest hurdle facing tenants is their inability to commit to long lease terms. With a tightening market and decreased vacancy, landlords are pushing for higher rental rates. tenants are hard-pressed to examine increases in operating expenses, and consider their options to relocate into newer tax abated buildings, as tax abatements expire on their existing buildings.

leslie Hobbsdirector of Marketing | ohiotwo Miranova placesuite # 900Columbus, ohio 43215tel +1 614 410 5640

Jonathan schuenresearch analysttwo Miranova placesuite # 900Columbus, ohio 43215tel +1 614 437 4495

522 offices in 62 countries on 6 continentsunited states: 147Canada: 31latin america: 19asia pacific: 201eMea: 118

• $1.8 billion in annual revenue

• 1.25 billion square feet under management

• over 12,500 professionals

this document/email has been prepared by Colliers International for advertising purposes. Colliers International statistics and data are audited annually and may result in revisions to previously reported quarterly and final year-end figures. sources include Columbus dispatch, Business First, Xceligent, Costar, Chain store age, Wall street Journal, Bureau of labor statistics, Bureau of economic analysis, Gallup and the Cleveland Federal reserve.

www.colliers.com/columbus

accelerating success.

united states:

Greater Columbus regionrichard B. schuen sIor CCIMCeo | principal | Columbustwo Miranova placesuite # 900Columbus, ohio 43215tel +1 614 410 5612

research & forecast report | Q1 2013 | industrial | Greater Columbus reGion