www.ColliersNashville.com

1Q

2012

2012

Forcast

VACANCY

NET ABSORPTION

CONSTRUCTION

RENTAL RATE

MARKET REPORTNASHVILLE

First Quarter Is Off To A Great Start For 2012As the nation continues to recover from the economic recession, the Nashville industrial market has shown flexibility and continued growth from the end of 2011. There are several indicators that the market improve during the upcoming year. The Nashville unemployment rate decreased to 6.9%, which is well below the national average of 8.3%, and the gross metro product (GMP) is up 7.0% from the pre-recession peak.

Companies are looking to indicators such as these to make decisions such as relocation and expansion. Nashville is already seeing this trend with the construction of the two Amazon.com distribution centers and the Nissan plant hiring over 1,000 people. Additionally, Saks just leased a 564,300 square foot warehouse in the Southeast Corridor, Bridgestone Americas leased a 332,000 square feet at Commerce Farms 3 and Gibson Guitar leased a 85,000 square feet in the IBD. These are just a few of the

MARKET INDICATORS

1Q 2012 | INDUSTRIAL

Nashville Industrial MarketSummary of Statistics, Q1 2012

Vacancy Rate: 10.8%

Absorption: 1,227,143 SF

Under Construction: SF

Asking Rents Per Square Feet: Overall Rental Rates: $4.30Warehouse - Distribution: $3.90Light Industrial: $3.04Heavy - Mfg: $3.00Bulk Warehouse: $3.08Flex/R&D: $7.83

Quarterly Comparisons and Totals

QUARTER BUILDINGSTOTAL

INVENTORY SF

DIRECT

VACANT

DIRECT

VACANCY

RATE

SUBLEASE

VACANCY

RATE

NET

ABSORPTION

CURRENT QTR

NET

ABSORPTION

YTD SF

UNDER

CONSTRUCTION

SF

AVG

ASKING

RATE

Q1.12 1,941 159,613,660 17,163,536 10.8% 1.3% 1,227,143 1,227,143 2,257,220 $4.30

Q4.11 1,940 158,955,449 17,928,840 11.3% 1.4% 462,046 1,477,068 1,624,000 $4.24

Q3.11 1,944 159,219,825 18,368,566 11.5% 1.4% 811,107 774,327 3,124,000 $4.51

Q2.11 1,944 159,138,430 19,577,486 12.3% 1.4% (115,610) (111,324) 589,000 $5.44

Q1.11 1,946 158,970,444 19,153,453 12.3% 1.6% 479,828 479,828 2,032,000 $4.27

By Property Type

BUILDING TYPE BUILDINGS

TOTAL

INVENTORY

SF

DIRECT

VACANT

DIRECT

VACANCY

RATE

SUBLEASE

VACANCY

RATE

NET

ABSORPTION

CURRENT QTR

NET

ABSORPTION

YTD SF

AVG

ASKING

RATE

Bulk Warehouse 98 38,774,808 7,568,841 19.5% 3.5% 408,500 408,500 $3.08

Flex/R&D 225 12,104,258 1,620,712 13.4% 1.4% 151,217 151,217 $7.83

Heavy - Mfg 7 855,347 0 0.0% 0.0% 0 0 $3.00

Light Industrial 560 58,199,950 2,661,192 4.6% 0.7% 0 0 $3.04

Warehouse - Distribution 1,051 49,679,297 5,312,791 10.7% 0.4% 667,426 667,426 $3.90

-

Updated 7-2011

MARKET REPORT | Q1 2012 | INDUSTRIAL | NASHVILLE

www.ColliersNashville.com

companies that have expanded in the last quarter and several more are expected to do the same in the remainder of the year.

Vacancy rates lowered to 10.8% from 11.3% in the fourth quarter of 2011. Absorption posted an impressive positive 1,227,143 square feet during the first quarter of 2012. Most absorption occurred in the East and Southeast Corridor.

“The industrial market h as shown some very positive signs during such a rough economic recession,” stated Terry E. Smith SIOR CCIM, company Partner and Executive Vice President. “Nashville and Middle Tennessee are experiencing great activity and good growth, especially when you look at the other parts of the country. I expect that 2012 will only get better as we move through the year.”

Flex/R&D

Bulk Warehouse

Heavy - Mfg

Light Industrial

Warehouse - Distribution

1Q 2012 | Vacancy Space By Type

0

100000

200000

300000

400000

500000

600000

700000

800000

Nort

h

Sou

thw

est

Wes

t

Sout

heas

t

East

IBD

1Q 2012 | Net Absorption By Submarket

DEFINITIONS

Absorption - The net change in occupied space between the current quarter and the previous quarter, calculated by summing all the positive changes in occupancy and subtracting all the negative changes in occupancy.

Available SF - Space currently being marketed for lease or sublease.

Total Building SF - All single & multi tenant office buildings above 20,000 SF excluding medical, government and owner occupied.

Vacancy Rate - Percentage rate of the total amount of physically vacant space divided by the total amount of existing inventory.

*Bold text denotes Colliers International transaction.

RECENT SALES TRANSACTIONSSALES ACTIVITY

PROPERTY SELLER/BUYER SALE PRICE SIZE SF SUBMARKET

308 Mallory Station Road LP R&D LLC / Mallory Station LLC $5,800,000 67,498 Cool Springs/Franklin

4350 Hurricane Creek Schreiber Foods / Dairy Farms of America $2,250,000 70,625 Southeast Corridor

260 Cumberland Bend Undisclosed / Mental Health Cooperative, Inc. $1,535,000 15,042 North

424-432 6th Avenue Undisclosed / KVB Music LLC $1,420,000 22,500 IBD

1040 Acorn Drive J Partnership / Acorn Properties LLC $1,375,000 45,000 IBD

RECENT LEASING TRANSACTIONSLEASING ACTIVITY

PROPERTY ADDRESS TENANT SIZE SF TYPE SUBMARKET

1 Walden Book Dr - Bldg I Saks 564,300 New Southeast Corridor

Commerce Farms 3 Bridgestone 332,000 New East

Ameriplex Gibson Guitar 85,000 New IBD

211 Nesbitt Lane M&W Warehouse 75,000 Expansion North

Space Park North Robinson Tire 73,125 Sublease North

Cam International Cloplay Building Products 60,000 Expansion Southeast Corridor

2140 Dayton Avenue Janis Services 46,500 New Southeast Corridor

MARKET REPORT | Q1 2012 | INDUSTRIAL | NASHVILLE

www.ColliersNashville.com

UPDATE Market Comparisons

INDUSTRIAL MARKET

SUBMARKET BLDGSTOTAL

INVENTORY SF

DIRECT VACANT

SF

DIRECT VACANCY RATE

DIRECT VACANCY

RATE PRIOR QTR

SUBLEASE VACANCY

RATE

NETABSORPTION CURRENT QTR

SF

NET ABSORPTION

YTD SF

AVG ASKING RATE

EAST 305 26,259,908 26,259,908 16.2% 18.0% 0.5% 382,573 382,573 $3.93

Bulk Warehouses 29 12,852,289 3,444,605 26.8% 29.4% 0.0% 332,000 332,000 $3.10

Flex/R&D 42 1,846,181 279,049 15.1% 16.9% 0.0% 19,323 19,323 $7.30

Heavy - Mfg 1 76,058 0 0.0% 0.0% 0.0% 0 0 -

Light Industrial 87 5,277,623 82,000 1.6% 1.6% 0.0% 0 0 $3.66

Warehouse - Distribution 146 6,207,757 456,543 7.4% 8.8% 2.3% 31,250 31,250 $3.89

NORTH 450 39,866,721 2,987,716 7.5% 7.7% 1.5% 61,670 61,670 $3.55

Bulk Warehouses 19 6,995,658 725,000 10.4% 10.4% 5.5% 3,000 3,000 $3.01

Flex/R&D 40 1,580,142 201,337 12.7% 15.1% 0.0% 31,251 31,251 $6.40

Heavy - Mfg 1 314,125 0 0.0% 0.0% 0.0% 0 0 $3.00

Light Industrial 140 17,073,026 404,725 2.4% 2.4% 1.3% 0 0 $2.63

Warehouse - Distribution 250 13,903,770 1,656,654 11.9% 12.3% 0.0% 27,419 27,416 $3.32

SOUTHEAST 419 51,253,908 6,764,382 13.2% 13.6% 2.2% 605,395 605,395 $4.18

Bulk Warehouses 44 17,302,331 3,371,236 19.5% 20.4% 5.6% 73,500 73,500 $3.03

Flex/R&D 79 4,355,439 788,775 18.1% 18.8% 0.7% 19,301 19,301 $7.48

Heavy - Mfg 3 149,990 0 0.0% 0.0% 0.0% 0 0 -

Light Industrial 103 17,245,482 926,890 5.4% 5.4% 0.6% 0 0 $3.37

Warehouse - Distribution 191 12,188,177 1,677,481 13.2% 13.8% 0.4% 512,594 512,594 $4.26

SOUTHWEST 235 13,615,850 665,570 4.9% 5.7% 0.9% 76,948 76,948 $6.79

Bulk Warehouses 4 918,130 28,000 3.0% 3.0% 0.0% 0 0 $4.50

Flex/R&D 42 3,389,764 224,977 6.6% 9.3% 1.2% 76,542 76,542 $8.39

Heavy - Mfg 1 100,000 0 0.0% 0.0% 0.0% 0 0 -

Light Industrial 58 3,381,693 66,414 2.0% 2.0% 2.4% 0 0 -

Warehouse - Distribution 130 5,826,263 346,179 5.9% 6.3% 0.0% 406 406 $4.79

WEST 125 10,581,561 775,459 7.3% 7.5% 0.0% 21,428 21,428 $3.16

Bulk Warehouses 1 500,000 0 0.0% 0.0% 0.0% 0 0 -

Light Industrial 53 7,480,503 725,459 9.7% 9.7% 0.0% 0 0 $3.18

Warehouse - Distribution 71 2,601,058 50,000 1.9% 2.7% 0.0% 21,428 21,428 $3.16

IBD 406 17,952,766 1,708,212 9.5% 9.4% 0.6% 79,129 79,129 $4.90

Bulk Warehouses 1 206,400 0 0.0% 0.0% 0.0% 0 0 -

Flex/R&D 22 932,732 126,574 13.6% 16.1% 10.9% 4,800 4,800 $10.15

Heavy - Mfg 1 215,174 0 0.0% 0.0% 0.0% 0 0 -

Light Industrial 119 7,729,134 455,704 5.9% 5.9% 0.0% 0 0 $3.00

Warehouse - Distribution 263 8,869,326 1,125,934 12.6% 12.1% 0.0% 74,329 74,329 $3.62

GRAND TOTAL 1,941 159,613,660 17,163,536 10.8% 11.3% 1.3% 1,227,143 1,227,143 $4.30

MARKET REPORT | Q1 2012 | INDUSTRIAL | NASHVILLE

www.ColliersNashville.com

UNITED STATES:

NashvilleNate GreeneManaging Partner300 BroadwayNashville, TN, 37201TEL +1 615 850 2729FAX +1 615 850 3229

DIRECTOR OF MARKETING

NashvilleAllison Schepman300 BroadwayNashville, TN, 37201TEL +1 615 850 2748FAX +1 615 244 2957

512 offices in 61 countries on 6 continents

• $1.5 billion in annual revenue• 979 million square feet under management

• 12,500 professionals

Copyright © Colliers International

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it.

Accelerating success.

Jerry MieleDIR +1 615 850 2735

Associate

Bill BuckleyDIR +1 615 850 2705

Associate

Max SmithDIR +1 615 850 2722

Associate

Terry Smith, CCIM SIORDIR +1 615 850 2724

Exectutive Vice President & Partner

Tom Davis, SIORDIR +1 615 850 2730

Executive Vice President & Partner

ABOUT COLLIERS INTERNATIONAL – NASHVILLE Collier International Nashville is one of the largest full service commercial real estate

firms in the region. Its brokers provide a myriad of services to owners and tenants with a

commitment to excellence that has won them the respect of local, national and international

clients for many years. With more than 25 employees, the firm serves clients ranging from

Fortune 500 corporations, major banks and insurance companies to investors, private

institutions and small businesses.

Figure 1: Nashville Industrial Submarkets include North, East, Southest, Southwest, West and IBD.

Gallatin Rd.

Leba

non P

l.

West E

nd A

ve.

Harding Pl.

O ld Hickory Blvd.

Fran

klin

Moores Ln.

Murfreesboro Rd.

Nolensville Rd.

Done

lson

Pike

Briley

Pkwy.

Bell Rd

.

Woodmont Blvd.

Buena Vista

132

12

96

SOUTHWEST

WEST

SOUTHEAST

EAST

NORTH

IBD

Nate Greene, CCIMDIR +1 615 850 2729Managing Partner &

Partner