4Q

2011

2012

Forcast

VACANCY

NET ABSORPTION

CONSTRUCTION

RENTAL RATE

MARKET REPORTNASHVILLE

www.ColliersNashville.com

Market On the Right Track; 2012 Forecast Is PositiveThe end of 2011 brought a small sigh of relief in the commercial real estate industry. After a couple of rough years, this past year brought glimmers of hope as the market began to improve. The market’s momentum picked up and by the end of the year, absorption posted a positive 1,477,068 square feet. This is a drastic turnaround from the negative 1,450,477 square feet absorption at the end of 2010.

In addition to positive absorption, vacancy rates have started to drop, falling 90 base points from 2010’s fourth quarter to 2011’s fourth quarter. Contributing to this were several large transactions that were inked this year. This includes LKQ Corporations’ 105,600 square foot lease in the Southeast submarket and Sky High Sports’ 51,960 square foot lease in the Southeast submarket.

MARKET INDICATORS

4Q 2011 | INDUSTRIAL

Nashville Industrial MarketSummary of Statistics, Q4 2011

Vacancy Rate: 11.3%

Absorption: 462,046 SF

Under Construction: 1,624,000 SF

Asking Rents Per Square Feet: Overall Rental Rates: $4.24Warehouse - Distribution: $3.91Light Industrial: $3.07Heavy - Mfg: $3.00Bulk Warehouse: $3.12Flex/R&D: $7.49

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

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

Q4.10 1,950 158,292,862 19,349,141 12.2% 1.7% (478,523) (1,450,577) 2,032,000 $4.18

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

Warehouse - Distribution 1,050 49,032,051 5,373,094 11.0% 0.72% 245,937 62,642 $3.91

Light Industrial 560 58,188,985 2,661,192 4.6% 0.56% 122,730 (61,781) $3.07

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

Bulk Warehouse 98 38,774,808 8,062,905 20.8% 3.6% 15,600 1,521,025 $3.12

Flex/R&D 225 12,104,258 1,831,649 15.1% 1.26% 77,779 (44,818) $7.49

-

Updated 7-2011

New and current construction projects have also added to the momentum. Late in 2011, Amazon.com announced that it would build two fulfillment centers in Middle Tennessee with a ground breaking scheduled in the beginning on 2012. In addition to this, the area has several multi-year projects like the Nissan Battery Plant and the Hemlock Semiconductor Plant that are still under construction. This indicates a confidence in the area and its ability to host new businesses. Most importantly, these new projects will bring thousands of jobs to the Middle Tennessee region, reenforcing the trend of momentum.

The forecast for 2012 is positive, with several deals already in the works. We believe that vacancy rates will continue to drop, absorption will stay positive and asking rates will stabilize. A few points to focus on are the impacts of the upcoming presidential election, lowering unemployment rates and Nashville’s ability to continue to bring new business to the area.

Flex/R&D

Bulk Warehouse

Heavy - Mfg

Light Industrial

Warehouse - Distribution

2Q 2011 | Vacancy Space By Type

-100000

-50000

0

50000

100000

150000

200000

250000

300000

350000

400000

Nort

h

Sou

thw

est

Wes

t

Sout

heas

t

East

IBD

2Q 2011 | Net Absorption By Submarket

RECENT SALES TRANSACTIONSSALES ACTIVITY

PROPERTY BUYER SALE PRICE SIZE SF SUBMARKET

Southpark & Centrepoint Portfolio Crow Holdings $56,700,000 1,778,400 Southeast

Commerce Farms 3 PanCal $9,583,600 456,500 East

1901 Columbia Avenue City of Franklin $2,300,000 40,458 Southeast

RECENT LEASING TRANSACTIONSLEASING ACTIVITY

PROPERTY ADDRESS TENANT SIZE SF TYPE SUBMARKET

501 Mason Road LKQ Corporation 105,600 New Southeast

2140 Dayton Avenue FSi, Inc. 91,000 Renewal IBD

1260 Heil Quaker Blvd Singer Sewing Company 87,450 New Southeast

Airpark Business Center XI Sky High Sports 51,960 New Southeast

1253 Heil Quaker Blvd Austin Foam Products 40,800 Expansion Southeast

Elm Hill Industrial Center 4 Wilson Art 35,712 New East

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.

P. 2 | COLLIERS INTERNATIONAL

MARKET REPORT | Q4 2011 | INDUSTRIAL | NASHVILLE

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 4,714,769 18.0% 17.9% 0.6% 18,911 366,099 $3.94

Bulk Warehouses 29 12,852,289 3,776,605 29.4% 29.4% 0.0% 0 639,120 $3.09

Flex/R&D 42 1,846,181 311,371 16.9% 15.2% 0.01% (46,801) (114,454) $7.75

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

Light Industrial 87 5,277,623 82,000 1.6% 1.5% 0.0% 0 (62,000) $3.66

Warehouse - Distribution 146 6,207,757 544,793 8.8% 9.2% 2.3% 65,712 (96,567) $4.02

NORTH 450 39,866,721 3,081,188 7.7% 7.5% 2.0% (97,301) 248,417 $3.55

Bulk Warehouses 19 6,995,658 728,000 10.4% 9.5% 6.2% (90,000) (43,000) $3.13

Flex/R&D 40 1,580,142 238,188 15.1% 26.9% 0.0% (5,300) (7,214) $6.54

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% 2.6% 1.3% 47,214 75,721 $2.63

Warehouse - Distribution 250 13,903,770 1,710,275 12.3% 11.9% 1.1% (49,215) 222,910 $3.15

SOUTHEAST 419 50,677,119 6,881,099 13.6% 15.2% 2.1% 359,467 916,796 $4.20

Bulk Warehouses 44 17,302,331 3,530,300 20.4% 22.2% 5.6% 105,600 952,905 $3.09

Flex/R&D 79 4,355,439 818,134 18.8% 26.9% 0.6% 121,974 27,348 $7.39

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

Light Industrial 103 17,245,482 926,890 5.4% 5.3% 0.1% 0 (4,350) $3.40

Warehouse - Distribution 190 11,623,877 1,605,775 13.8% 15.3% 0.4% 131,893 (59,107) $4.22

SOUTHWEST 235 13,617,374 774,981 5.7% 6.5% 0.8% 91,540 134,758 $6.43

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

Flex/R&D 42 3,389,764 314,182 9.3% 9.9% 0.5% 10,273 52,625 $8.12

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

Light Industrial 58 3,383,217 66,414 2.0% 4.5% 2.4% 86,320 86,320 -

Warehouse - Distribution 130 5,826,263 366,385 6.3% 6.2% 0.1% (5,053) 23,813 $4.84

WEST 125 10,581,561 796,887 7.5% 7.4% 0.0% (16,900) (163,177) $3.23

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

Light Industrial 53 7,480,503 725,459 9.7% 9.5% 0.0% (16,900) (176,835) $3.18

Warehouse - Distribution 71 2,601,058 71,428 2.7% 2.7% 0.0% 0 13,658 $3.48

IBD 406 17,952,766 1,679,916 9.4% 7.0% 0.6% 106,329 (25,825) $4.42

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

Flex/R&D 22 932,732 149,774 16.1% 14.7% 10.9% (2,367) (3,123) $7.19

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

Light Industrial 119 7,729,134 455,704 5.9% 1.9% 0.0% 6,096 19,363 $3.05

Warehouse - Distribution 263 8,869,326 1,074,438 12.1% 10.9% 0.0% 102,600 (42,065) $3.75

GRAND TOTAL 1,940 158,955,449 17,928,840 11.3% 11.5% 1.4% 462,046 1,477,068 $4.24

MARKET REPORT | Q4 2011 | INDUSTRIAL | NASHVILLE

COLLIERS INTERNATIONAL | P. 3

UNITED STATES:

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

MARKETING DIRECTOR

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.

www.ColliersNashville.com

Accelerating success.

Jerry MieleDIR +1 615 850 2735

Affiliate Broker

Bill BuckleyDIR +1 615 850 2705

Affiliate Broker

Max SmithDIR +1 615 850 2722

Affiliate Broker

Terry Smith, CCIM SIORDIR +1 615 850 2724

Partner

Tom Davis, SIORDIR +1 615 850 2730

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

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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 2729

Managing Partner

MARKET REPORT | Q4 2011 | INDUSTRIAL | NASHVILLE