PROPERTY TYPE VACANCY RATES OVER COMPLETIONS

1 5 10 15 20 25 30

(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

8.0

9.0

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

3Q 08

4Q 08

1Q 09

2Q 09

3Q 09

4Q 09

1Q 10

2Q 10

3Q 10

4Q 10

1Q 11

Q2 11

Absorption

SQFT

Vacancy

Rate

Completions Absorptions Vacancy Rate

INDUSTRIAL TRENDS REPORTGREATER COLUMBUS REGION

www.colliers.com/columbus

Big Gains Drive MarketINDUSTRIAL MARKET OVERVIEWThe second quarter got the spark the market has been looking for this past year. With unemployment in industrial sectors decreasing steadily, albeit slowly, each month for the last twelve months and with rental rates finding an equilibrium within the economy, we expect continued stability. The Columbus region posted great results in the second quarter with more than 2.1 million square feet of positive absorption. This is the largest single quarter increase since well before the recession began. Online retailer Thirty-One Gifts led the charge leasing 750,000 square feet at 4545 Fisher Road in the west submarket. Continued on page 2...

FORECASTS AND REFLECTIONS• There were a number of significant institutional

sales this quarter: 5235 Westpoint Drive sold for $41 million, 1580-1600 Williams Road sold for $19.4 million, and 6500 Adelaide Court sold for $15.1 million. All told, 2.3 million square feet of space transferred in institutional sales and all in the Southeast submarket.

• Construction activity was steady as a few large projects continue to grind to completion including the 1.3 million Mars Petcare facility.

• As the cost of employment rises due to health

care costs, more industrial users are looking to increase productivity through capital outlays rather than hiring. The Commerce department reported that spending on employees has grown by 2 percent while spending on capital has increased by 26 percent. It is presently unclear how this will affect industrial leasing as industrial firms will need space regardless of payroll, but it is a significant change in the way firms are doing business.

RENTAL RATES

Asking rental rates re-mained steady for each property subtype. Prices seem to have cleared, that is, the downward shock to prices due to the recession has ended for now and the value of real estate com-pared to the rest of the economy has stabilized. This is good news as ten-ants and landlords can be-gin to find more secure positions moving forward.

MARKET INDICATORS

RENTAL RATESRates for the Major Product Types

Q2

2011

Q3

2011*

VACANCY

NET ABSORPTION

CONSTRUCTION — —

RENTAL RATES — — *Projected change from previous quarter

2.5

2.0

1.5

1.0

0.5

0

$2.20

$2.15

$2.10

$2.05

$2.00

$1.95

$1.90

$1.85

$1.803Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q10 4Q10

Q2 2011 | INDUSTRIAL

$2

$4

$6

$8

3Q

08

4Q

08

1Q

09

2Q

09

3Q

09

4Q

09

1Q

10

2Q

10

3Q

10

4Q

10

1Q

11

Q2 1

1

Rental R

ate

General Industrial R&D/Flex Warehouse/Dist.

REGIONAL INDUSTRIAL ECONOMICSThe Federal Reserve Bank of Cleveland reports twice 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). The Beige Book from June 2011 reported that industrial activity in the fourth district continued to expand at modest pace, but noted that some manufacturers see softening market conditions. Freight transportation executives reported that shipping volume had expanded for a broad range of manufacturing goods and expect more growth. Manufacturers reported that production was stable or slightly higher than the previous six week period. Expectations called for continued growth through at least the first half of 2011. Capacity utilization continued to trend higher for manufacturers and steel producers, and inventories remained close to targeted levels. Freight transportation experienced mixed results because of severe winter weather, but most expected sales growth to be stronger in 2011 than in years past.

The July 2011 Beige Book reported that activity in the fourth district had improved slightly on balance. Manufacturers saw stable or rising orders as half reported increased orders, but many expect slowing in the third quarter. Capacity utilization rates, a very significant indicator of future leasing, remained below what is considered normal for a majority of manufacturers. Manufacturers remain committed

to increasing capital outlays relative to year-ago levels which is consistent with reports from the Commerce Department noted above. Freight transportation shipping volume expanded slightly as the effects of supply chain disruptions from the Japanese earthquake and severe spring weather dissipated.

The Bureau of Labor Statistics reported that Manufacturing employment of 62,200 employees in June was an increase of 6,000 over May while year over year manufacturing is down by 1.7 percent. Trade, Transportation, and Utilities employment grew by 900 from May and was greater than June 2010 by 2.1 percent. Mining, logging, and Construction increased by 1,000 from May and up 12.2 percent from a year ago. In the first half of 2011, manufacturing employment has been down generally from a year ago while Trade, Transportation and Utilities, and Mining, Logging and Construction are fairing better than in 2010.

COST OF BUSINESSA report by Ernst & Young places Ohio as the third lowest tax burden on businesses with 4.4 percent. The study, “Competitiveness of state and local business taxes on new investment,” listed only Maine and Oregon as having lower tax burdens on new investment than Ohio. The report cited that changes over the last five years in Ohio have dramatically improved the tax climate.

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 AND DEALS

PROPERTY ADDRESS SALES DATE SALE PRICE SIZE SF SALES PRICE / SF TYPE

5235 Westpoint Drive April 2011 $41,000,000 1,200,000 $34.17 Warehouse

1580-1600 Williams Road June 2011 $19,400,000 750,000 $25.87 Warehouse

6500 Adelaide Court June 2011 $15,166,000 354,676 $42.76 Warehouse

2225 Spiegel Drive May 2011 $7,800,000 165,133 $47.23 Warehouse/Freezer

1715 Georgesville Road June 2011 $2,515,000 112,500 $22.35 Warehouse/Distribution

8000 Memorial Drive May 2011 $3,343,000 51,788 $64.55 Light Industrial

250 S. Jefferson Avenue April 2011 $1,050,000 38,000 $27.63 Light Industrial

PROPERTY ADDRESS LESSOR LESSEE LEASE SF ASKING PRICE / SF (NNN) TYPE

4545 Fisher Road PCCP IRG COLUMBUS Thirty-One Gifts 745,680 $2.00 Warehouse/Distribution

6000 Green Pointe Drive Cabot II Schwartz Paper Co. 226,000 - Warehouse/Distribution

2000-2020 Corvair Blvd. Southeast Industrial Park

Realty Co.

N/A 100,000 $1.65 (MG) Warehouse

711 Southwood Avenue Fortuno Management Inc Rumpke 100,000 $1.90 Flex/R&D

2055 Corvair Blvd. Southeast Industrial Park

Realty Co.

Integrity Moving 50,000 $1.95 (Gross) Light Industrial

Union County

Delaware County

Licking County

North

East

CBD

West

Southwest Southeast

Fairfield County

Pickaway County

Madison County

P. 2 | COLLIERS INTERNATIONAL

RESEARCH & FORECAST REPORT|Q22011|INDUSTRIAL|GREATERCOLUMBUSREGION

CONSTRUCTION CONTRACTS

Contractsforcommercialconstruction,whichincludesnewconstructionaswellasbuild-outsoncommercialproperties,totaled$92.7millioninJune,downfrom$93.5millioninMay.MarsPetcareandtheconstructioninNewAlbanyhelpedcommercialconstructionactivityinthefirstfivemonthsoftheyear,withallmarketcontractsvaluedat$572.6million.In2010constructionactivityhadcrossedthe$800millionmarkbyMay.

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/FlexCBD 5,907,062 814,084 13.8 225,206 264,591 - - - $4.75

EAST 20,182,243 3,747,772 18.6 158,371 74,340 523,000 - $2.91 $5.35

FAIRFIELD 6,771,842 444,727 6.6 56,000 73,600 - - $4.00 $6.90

LICKING 18,727,930 1,362,016 7.3 237,874 237,874 - - $2.90 -

MADISON 6,843,397 - 0.0 - - 1,470,000 - - -

NORTH 16,747,580 1,523,482 9.1 (15,616) 13,109 - - $4.13 $4.63

NORTH DELAWARE 9,132,849 835,468 9.1 67,947 34,285 - - $3.12 $5.96

PICKAWAY 3,550,850 71,900 2.0 - (8,800) - - $2.48 -

SOUTHEAST 64,181,757 10,565,422 16.5 501,637 104,782 - - $2.52 $3.26

SOUTHWEST 17,683,127 1,686,642 9.5 (60,109) (177,657) - - $2.60 $3.02

UNION 6,333,817 506,601 8.0 23,996 (9,346) - - - $5.93

WEST 35,935,786 4,516,613 12.6 907,841 1,043,555 - - $2.31 $4.37

TOTALS 211,998,240 26,074,727 12.3 2,103,147 1,634,154 1,992,000 - $2.56 $4.24

Net Absorption Construction Asking Rental Rates

SUBMARKET Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product TypeR&D/FLEX 20,210,125 3,278,965 16.2 259,969 268,633 - - $4.24

GENERAL INDUSTRIAL 71,945,581 5,628,747 7.8 496,880 595,755 587,000 - $3.13

WAREHOUSE/

DISTRIBUTION

119,842,534 17,167,015 14.3 1,346,298 776,396 1,405,000 - $2.56

TOTALS 211,998,240 26,074,727 12.3 2,103,147 1,640,784 1,992,000 - -

QUARTERLY COMPARISON AND TOTALS

Net Absorption Construction Asking Rental Rates

QUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions ($)Q1, 2011 211,923,599 27,972,230 13.2 (468,993) (468,993) 1,992,000 - $2.72

Q4, 2010 205,420,829 26,113,915 12.71 743,685 (766,901) 1,575,000 (536,292) $2.57

Q3, 2010 205,957,121 27,183,626 13.20 313,420 (1,381,820) 170,000 - $2.93

Q2, 2010 205,957,121 27,513,381 13.36 (337,420) (1,695,550) 170,000 (1,985,385) $3.18

RESEARCH & FORECAST REPORT|Q22011|INDUSTRIAL|GREATERCOLUMBUSREGION

COLLIERS INTERNATIONAL | P. 3

Average asking rental rates remained flat and they are likely to continue to remain so throughout the year. Market activity and interest did not increase substantially on the leasing side. Market activity and interest has increased on the sale side. Investment sales picked up second quarter and the interest for investment sales seems to be sustainable as prices have increased for fully-leased institutional buildings.

Market Activity Volume is the sum of the absolute value of each absorption change in the market and it tells us a little more about what exactly happened to the market behind the absorption number. The Market Activity Volume was up significantly from Q2 2011 when less than 600,000 square feet of space was in transition. More than 3.2 million square feet of space was in transition this quarter meaning that nearly two thirds of all of the market movement was absorption. In the previous two quarters absorption was very low while market activity volume was high, meaning that in this quarter space is being leased by firms who are not just moving across town: a very good sign.

A cross section of the market by property types reveals that general, warehouse, and flex/R&D space all saw positive absorption.

CENTRAL BUSINESS DISTRICTThe Central Business District (CBD) recorded a third straight quarter of positive absorption with 225,206 square feet bringing the vacancy rate down to 13.8 percent. Leasing was driven by 96,000 square feet at 425 Town Street and 100,000 square feet at the Tech South development.

EASTThe submarkets comprising eastern Columbus are East and Licking County. The East experienced more than 150,000 square feet of absorption with a significant lease of 94,000 square feet at 285 Hamilton Road by Glazers. Construction continues at the new Accel facility and the Vee Pak site.

Licking county gained more than 280,000 square feet this quarter from four larger leases, and notably there were no vacancies created this quarter. 3356 National Road was sold to an owner user and Holophane Lighting Inc. moved into 140 Carey Street.

NORTHThe submarkets comprising the northern columbus are North and North Delaware. The northern submarkets feature some of the lowest vacancy rates in the region considering that they make up 12 percent of the market. Some movement occurred in North Delaware with eight properties leasing under 30,000 square feet each provided a boost, while a single owner user of 35,000 square feet was foreclosed on.

SOUTHEASTThe Southeast submarket regained all of the negative absorption from last quarter. Big absorption came from Boar’s Head’s purchase of 2225 Spiegel Drive and Schwartz Paper leasing at 6000 Green Pointe Drive, as well as an expansion back into vacant space by owner Abercrombie & Fitch of 6600 Donn Eisele Street drove this market. As noted earlier, 2.3 million square feet of space sold under institution sales in this submarket alone.

SOUTHThe southern submarkets are Pickaway and Fairfield counties. Both markets were unchanged this quarter.

SOUTHWESTThe Southwest submarket added to last quarters negative absorption of 117,548 square feet with roughly 60,000 square feet more of negative absorption. The largest vacancy was Valley Towing at 2200 Southwest Boulevard.

WESTThe submarkets on the west side of Franklin county are West, Madison, and Union. The West submarket experienced a large jump in positive absorption of 1,043,555 square feet. Thirty-One Gifts leased 750,000 square feet at 4545 Fisher Road which until this lease had 1.5 million square feet vacant.

CSX, which had purchased 1999 Westbelt Drive and 2000 Westbelt Drive in first quarter 2011, is demolishing both structures. Speculation in the logistics and transportation industry suggests that CSX may be looking to expand their intermodal yard.

The construction of Mars Petcare continues on schedule.

Leslie HobbsMarketing and Research Manager8800 Lyra DriveSuite #150Columbus, Ohio, 43240TEL +1 614 410 5640FAX +1 614 410 3310

Jonathan BadgleyResearch Analyst8800 Lyra DriveSuite # 150Columbus, Ohio, 43240TEL +1 614 410 5652FAX +1 614 410 3327

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• $1.6billioninannualrevenue

• 672.9millionsquarefeetundermanagement

• Over10,000professionals

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, and the Wall Street Journal.

www.colliers.com/columbus

Accelerating success.

UNITED STATES:

ColumbusRichard B. Schuen SIOR CCIMCEO | Principal | Columbus8800 Lyra DriveSuite # 150Columbus, Ohio 43240TEL +1 614 410 5612FAX +1 614 410 3312

RESEARCH & FORECAST REPORT|Q22011|INDUSTRIAL|GREATERCOLUMBUSREGION