Industrial Market Snapshot

St. Louis Second Quarter 2013

Market Tracker
*Arrows = Current Qtr Trend

Vacancy
8.2%

Net Absorption
639,164 SF

Deliveries
0 SF

Effective Rent
$4.07 NNN

Another Quarter of Strong Growth for the Industrial Market

Following a strong first quarter, the industrial market realized additional occupancy growth in the second quarter of 2013. A total of 639,000 square feet of positive absorption was realized in the quarter as the vacancy rate held at 8.2%. The growth for the industrial sector marks the fourth consecutive quarter of positive absorption with over 2,100,000 square feet absorbed over that time. The 639,000 square feet of positive absorption included 479,000 square feet of newly constructed space at the Westway I building in Edwardsville. Contegra Construction Company doubled the distribution center for Procter & Gamble, which expanded into the new space. This expansion represented the only new construction brought to market in the second quarter. GM announced that they will continue to expand in Wentzville with the addition of a 114,000 square foot stamping plant. The stamping plant will be constructed at the same location where they are building a 500,000 square foot body shop. Construction on the stamping plant will begin in July 2013 and GM expects the press to be operational by early 2015. Modern Bulk continued to perform well in the second quarter, realizing 719,000 square feet of positive absorption, though this was partially driven by the build-to-suit for Procter & Gamble at Westway I. Other significant transactions in the modern bulk space in the quarter included TAGG Logistics relocating and expanding from 147,000 square feet of office and bulk warehouse space in Maryland Heights to 203,000 square feet of modern bulk space at Hazelwood Logistics Center I and Cord Moving and Storage swapping 55,000 square feet of bulk warehouse space at Earth City Industrial Center 3 for 55,000 square feet of modern bulk space on Rider Trail in Earth City. Service centers, bulk warehouses, and office warehouses all took a step back in the second quarter, losing 62,000 square feet, 72,000 square feet, and 127,000 square feet, respectively. Geographically, occupancy growth was realized in the Metro East, South County, St. Charles County, and North County, while losses were experienced in the City, MidCounty, and West County. The Metro East had the strongest performance of any of the St. Louis area markets with 510,000 square feet of absorption, primarily driven by the Procter & Gamble expansion. North County realized 296,000 square feet of positive absorption in the quarter, which was primarily driven by the previously discussed move by TAGG Logistics. St. Charles County realized 207,000 square feet of absorption, which was partially the result of ALMO Distribution occupying 129,000 square feet of modern bulk space at Fountain Lakes II. The worst performing market in the quarter was the City, which realized 215,000 square feet of negative absorption, which pushed the vacancy rate to 8.4%. This loss was largely driven by Sigma Aldrich vacating 127,000 square feet at St. Louis Commerce Center II and LaBarge Properties vacating 103,000 square feet of space at 3400 Morganford Rd. The City and Mid-County are the only two markets which have not improved since the significant losses experienced in the industrial market in 2009.

ST. LOUIS INDUSTRIAL

Economic Indicators
Q2 12
St. Louis Employment St. Louis Unemployment U.S. CCI U.S. Unemployment 1310.4 7.30% 65.4 8.20%

Q2 13
1319.8 7.00% 81.4 7.60%

Net Absorption
1.5 1

Square Feet (Millions)

.5 0 -.5 -1

-1.5 -2

2008

2009

2010

2011

2012

2013

Vacancy Rate
10% 9% 8% 7% 6% 5% 2008

2009

2010

2011

2012

2013

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Cassidy Turley Industrial Market Snapshot

St. Louis, Missouri Second Quarter 2013
SUBMARKET City Metro East Mid-County North County South County St. Charles County West County By Property Type Modern Bulk Traditional Bulk Office/Warehouse Manufacturing Service Centers Other ST. LOUIS TOTAL 86 267 3,610 511 319 107 4,900 30,685,101 34,293,586 99,405,220 55,057,999 12,806,105 2,668,058 234,916,069 153,845 205,925 157,952 26,350 20,000 564,072 3,271,595 4,540,058 6,513,152 2,787,970 1,387,330 99,106 18,599,211 11.2% 13.8% 6.7% 5.1% 11.0% 3.7% 8.2% 719,131 (71,575) (127,079) 124,694 (62,145) 56,138 639,164 744,262 78,271 240,898 124,367 (129,318) 54,648 1,113,492 368,370 227,500 140,870 TOTAL BLDGS 1,574 288 732 588 559 559 600 INVENTORY 66,500,462 27,288,023 24,856,752 47,087,727 20,423,678 26,006,255 22,753,172 SUBLET VACANT 224,192 43,656 84,224 164,500 20,000 27,500 DIRECT VACANT 5,371,959 1,304,493 2,168,148 5,044,327 1,658,383 1,039,958 2,011,943 VACANCY RATE 8.4% 4.8% 8.9% 10.9% 8.9% 4.1% 9.0% CURRENT NET ABSORPTION (215,408) 510,451 (105,785) 295,568 110,597 206,708 (162,967) YTD NET ABSORPTION (344,696) 545,338 (121,063) 516,586 235,729 223,282 58,316 UNDER CONSTRUCTION 227,500 140,870 -

Key Lease Transactions 2Q 13

PROPERTY
5620 Inner Park Dr. 372 Hazelwood Logistics Center Dr. 5415-5463 Phantom Dr. 12949-12955 Enterprise Way
160-184 Corporate Woods Ct. 2392 Grissom Dr. 4238-4240 N. Rider Trail, Ste

SF
1,262,648 202,613 126,642 88,425
63,728 61,293 55,049

TENANT
Conopco Inc. (UniLever) TAGG Logistics USPS Store Supply
Keystone Automotive Mary Elle Fashions d/b/a Meridian Cord Moving & Storage

TRANSACTION TYPE
Renewal New Renewal New
Renewal Renewal & Expansion New

SUBMARKET
Edwardsville Hazelwood Hazelwood Hazelwood
Earth City West Port Earth City

Industrial Submarkets
St. Louis, Missouri

70

2
270

64

1
270

170

5
255 55

55

3
44

64

Key Sales Transactions 2Q 13

PROPERTY
17 Cermak Blvd. 9711-9719 Green Park Ind 183-189 McDonnell Blvd. 5202-5240 S. Thirty-eighth 4500 Swan Ave.

SF
202,352 80,000 70,703 57,055 51,500

BUYER
Modineer Co. Burdrovich Real Estate WJL Services Hayes Dev LLC JGDD SWAN LLC

SELLER
Wainwright Properties Ltd WestCore/DRA Trustco, LLC Bill Austin SSLJ LLC

SUBMARKET
St. Charles County Kirkwood South Hazelwood City South City South
1. 2. 3. 4. St. Charles County North County West County Mid County 5. St. Louis City 6. Metro East 7. South County

Tim Walsh
Managing Principal 7700 Forsyth Boulevard 9th Floor St. Louis, Missouri 63105 Tel: 314.746.0326 Fax: 314.862.1648 Email: tim.walsh@cassidyturley.com
The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. Copyright 2013 Cassidy Turley. All rights reserved.

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