supply-chain renaissance continues to drive industrial demand · industrial market outlook q2 2016...

United States Research Report

INDUSTRIAL MARKET OUTLOOKQ2 2016

The U.S. industrial market continued its exceptionally positive run during the first half of 2016. In this past quarter we witnessed the lowest vacancy rates and the highest levels of net absorption, new supply, product under construction and asking rents ever recorded. Supply-chain modernization and positive economic fundamentals continue to drive demand. The bulk of activity remains concentrated in core industrial markets but is also growing in other coastal and inland port locations. With the supply-chain renaissance still in its infancy, many markets are reporting relentless demand from retailers and wholesalers seeking to satisfy rapidly growing e-commerce needs. We expect the surge in requirements to keep vacancies low, absorption levels high and new development robust for the remainder of the year and into 2017.

Key Takeaways > Despite weak GDP growth in the first half of the year, consumer spending has been solid, particularly in Q2, with an annualized growth rate of 4.2%—the highest rate of growth since 2014. Major factors include accelerating job growth as well as continued recovery in housing markets, leading to increased consumer spending and confidence.

> E-commerce sales continued to outperform overall retail sales. Online sales grew 15% in Q1 compared with the same time a year ago, five times higher than the 3% overall retail growth for the same time period. These sales generated far more demand for industrial space than equivalent sales in brick-and-mortar stores, as merchants shift more goods into warehouses rather than into stores.

> Vacancy rates declined versus mid-year 2015 in 84% of the markets we track. At mid-year only 6.0% of the nation’s industrial space is vacant, the lowest rate on record. Vacancies dropped despite 63 million square feet (MSF) of new supply completing in Q2, breaking the previous record of 60 MSF set just last quarter. Development will not ease any time soon, with a record 204 MSF now under construction.

> Strong leasing and lower vacancies, especially in modern class A distribution centers, drove up asking rents in Q2 to $5.66 per square foot per year (PSF/YR), an all-time record for the country (not adjusted for inflation). Asking rents for distribution space increased year-over-year in 87% of the markets we track.

Supply-Chain Renaissance Continues to Drive Industrial Demand James Breeze National Director of Industrial Research | USA

Summary Statistics, Q2 2016 United States Industrial Market

Vacancy Rate 6.0%

Change From Q4 2015 -0.2%

% of Markets with Lower Vacancies Compared with Q4 2015

81.8%

YTD Absorption (MSF) 77.0

% of Markets with Positive Absorption in 2016

100.0%

YTD New Supply (MSF) 62.8

YTD New Supply to Inventory % 0.8%

Under Construction (MSF) 203.5

ASKING RENTS PER SQUARE FOOT PER YEAR

Average Warehouse/Distribution Center

$5.66

Change from Q4 2015

4.3%

Market IndicatorsRelative to Prior Period

Q2 2016

Q2 2017*

VACANCY

NET ABSORPTION

CONSTRUCTION

RENTAL RATE**

* Projected, relative to prior period** Warehouse rents

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U.S. Economic Indicators

GDP

Q2 2016 +1.2% in Q2

Q1 2016 +0.8% in Q1 2016 (adjusted)

ISM

Apr-16 PMI® Jul-16 PMI 52.6, up 4.6 pctg. pts. from Dec. 2015

RAIL TIME INDICATORS: AAR.ORG

Total Railcar Traffic - 11.7% since Aug. 2015

Intermodal Traffic -2.8% since Aug. 2015

2 United States Research Report | Q2 2016 | Industrial Market Outlook | Colliers International

Sources: BEA, ISM, AAR

Robust Job Growth and Consumer Spending a Positive Sign for Industrial Real Estate

The U.S. economy decelerated significantly in early 2016 from its already weak pace of recent years, but the news wasn’t entirely bad: Job growth remains robust, though the above-average growth could not be sustained as the economy approached full employment. And while GDP growth has been a clear disappointment, with gains over the past four quarters barely above 1%, most economic indicators remain good to very good, particularly consumer spending, which registered its strongest quarter since 2014.

Equity markets joined the overwhelming consensus of economists and agreed that Brexit was not the grave threat to global prosperity suggested by market volatility in the immediate aftermath of the vote. Economists and the markets have now refocused their attention back to the domestic U.S. economy where key indicators continue to send mixed messages.

The employment reports have been stronger this summer, adding 255,000 jobs in July on top of 292,000 new payrolls in June, reversing the slower growth trend this past winter and spring. The increase in jobs is having a positive effect on consumer confidence and spending. Consumer spending increased 4.2% at an annual rate, the highest rate of growth since 2014. Nonetheless, the government’s first estimate of Q2 GDP was only 1.2%, about half of the consensus forecast. Moreover, the government also retroactively revised its GDP estimates for the past three years, with Q1 GDP adjusted down to only 0.8%. So, GDP did indeed accelerate this past quarter, but only relative to the downgraded Q1 figure and still well below expectations.

Thus, economic growth for the year is unlikely to match even the moderate pace averaged over the past few years, though the pace of growth should pick-up in the second half of the year. With real GDP barely growing above stall speed and preliminary Q3 GDP figures not due until late October, the Fed is most unlikely to raise rates in September. As always, future hikes will depend on job gains and economic growth. Regardless, the magnitude and pace of near-term hikes will not be material to the real estate sector.

U.S. Industrial Indicators - July 2016

INDEXSERIES INDEX

(JUL 2016)

SERIES INDEX

(JUN 2016)

PERCENTAGE-POINT

CHANGEDIRECTION RATE OF

CHANGETREND*

(MONTHS)

PMI® 52.6 53.2 -0.6 Growing Slower 5

New Orders 56.9 57 -0.1 Growing Slower 7

Production 55.4 54.7 0.7 Growing Faster 7

Employment 49.4 50.4 -1.0 Contracting From Growing 1

Supplier Deliveries 51.8 55.4 -3.6 Slowing Slower 3

Inventories 49.5 48.5 1.0 Contracting Slower 13

Customers’ Inventories 51.0 51.0 0.0 Too High Same 2

Prices 55.0 60.5 -5.5 Increasing Slower 5

Backlog of Orders 48 52.5 -4.5 Contracting From

Growing 1

Exports 52.5 53.5 -1.0 Growing Slower 5

Imports 52.0 52 0.0 Growing Same 2

OVERALL ECONOMY Growing Slower 86

Manufacturing Sector Growing Slower 5

*Number of months moving in current directionSource: ISM

10.7%

18.5%

23.7% 22.3%

5.5%

10.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Q4 1970-Q4 1973

Q1 1975-Q1 1980

Q4 1982-Q3 1990

Q1 1991-Q1 2001

Q4 2001-Q4 2007

Q3 2009-present

Emp

Gro

wth

GD

P G

row

th

GDP Growth Emp Growth

Avg GDP Growth Last 6 Expansions: 3.7%

$461 $422

$599

$345 $391

$589

$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600 $625

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

May-1

6

Retail Wholesale

1/3 More in Stores

49.4

77.0

36.0

62.8

7.7%

6.0%

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

Q2 2014 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2

Vaca

ncy

%

New Supply (MSF) Absorption (MSF) Vacancy Rate (%)

$ B

illio

ns

GDP & Employment Growth by Expansion

Source: Bureau of Economic Analysis, Bureau of Labor Statistics


Relentless Demand Leads to a Record-Breaking Quarter for Industrial Real Estate

E-commerce sales rose an impressive 15% in the first quarter (latest data available) compared with the same time period last year. The surge in e-commerce sales is forcing retailers and wholesalers to modernize the supply chain. This includes relocating to distribution centers with contemporary material-handling capabilities near population centers or inland ports suitable for reaching consumers quickly. Retail and wholesale inventories are also on the rise as e-commerce requires retailers and wholesalers to keep higher product inventories in distribution centers to prevent stock-outs in an increasingly competitive online sales environment. These trends work to the advantage of industrial markets.

The rebound of the housing market is another contributor to the robust growth in industrial real estate. Supported by job growth and near record-low mortgage rates, first-time home buyers helped existing home sales increase for the fourth consecutive month in June, with a 3.0% increase compared with June 2015. Existing home sales are a boon to the retail industry, generating an upsurge in demand for home improvement items, furniture and appliances. E-commerce is also supported by strong home-sales fundamentals. Online home store Wayfair.com expanded into large chunks of distribution space across the country in the first half of 2016.

The demand for larger, modern space created record-setting fundamentals in Q2. More than 77 MSF were absorbed, surpassing the previous record of 72 MSF in Q2 2015 by 7%. A whopping 141 MSF were absorbed in the first half of 2016 with core markets dominating occupancy gains, including Chicago, which led the nation at 14 MSF. The record amount of absorption lowered vacancies in the U.S. to 6.0% at mid-year, 70 basis points (BPS) lower than this time last year and the lowest vacancy rate recorded going back to the 1980s. Low vacancies continue to induce development across

Savannah, GA1.7M

Memphis, TN3.4M

Louisville, KY2.2M

Inland Empire, CA10.9M

Kansas City, MO-KS1.6M

Indianapolis, IN5.1M

Stockton/San Joaquin County, CA4.6M

St. Louis, MO1.7M

Seattle/Puget Sound, WA2.2M

Pittsburgh, PA1.9M

Phoenix, AZ2.6M

Orlando, FL1.8M

Nashville, TN3.4M

Minneapolis/St. Paul, MN1.6M

Detroit, MI5.3M

Dallas-Ft. Worth, TX9.1M

Atlanta, GA10.5M Washington

DC2.8M

Baltimore, MD2.6M

Cincinnati, OH3.3M

Philadelphia, PA6.0M

New Jersey- Central2.6M

New Jersey -Northern

3.4M

Greenville/Spartanburg, SC4.9M

Cleveland, OH1.7M

Los Angeles, CA2.2M

Milwaukee, WI1.9M

Chicago, IL14.3M

1.6M 5.0M 10.0M 14.3M

1.0M 14.3M

YTD Absorption

Top 30 Markets: Absorption YTD

the country. A record-breaking 62 MSF were completed in the U.S. in Q2, led by the Inland Empire at 10.1 MSF. In all, nearly 123 MSF of space were completed in the first half of 2016, with the Inland Empire also leading the pack at 15 MSF or 12% of the total. New development is not expected to ease any time soon as the pipeline continues to grow. Yet another record was broken in Q2 when the amount of under-construction projects reached 204 MSF, 6% higher than the previous record set in Q4 2015. Dallas-Ft. Worth accounts for 22 MSF of this activity, 91% of which is speculative.

Vacancy vs. YTD Absorption (Largest 20 Markets) By Port Location and YTD Speculative New Supply

Source: Colliers Q2 2016 Industrial Survey

0M 1M 2M 3M 4M 5M 6M 7M 8M 9M 10M 11M 12M 13M 14M 15MQ2 2016 Absorption YTD

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

Q2 2

016

Indu

stria

l Vac

ancy

Rat

e

0.7M

Charlotte, NC

New Jersey - Central 1.5M

Seattle/Puget Sound, WA1.4M

Los Angeles, CA1.5M

Detroit, MI0.0M

Philadelphia, PA3.6M

New Jersey - Northern0.0M Median

Med

ian

Eastern USGreat LakesGulf CoastInlandWest CoastNo Port

Port Location

RegionMidwestNortheastSouthWest

Houston, TX2.9M

Milwaukee, WI1.6M

San Jose/Silicon Valley, CA

Cleveland, OH0.2M

Phoenix, AZ1.9M

Inland Empire, CA6.3M

Dallas-Ft. Worth, TX7.5M

Atlanta, GA7.1M

Chicago, IL5.4MMinneapolis/St. Paul, MN

0.6M

Cincinnati, OH0.0M


Investment Activity

Despite record-breaking demand, investment volume declined for the second consecutive quarter to $12 billion, bringing the year-to-date total to $26 billion—31% lower than the record-breaking volume transacted at mid-year 2015. Lower transaction volumes are not due to a lack of demand but rather because of the lack of large, national portfolio sales that made 2015 a record-breaking year for industrial investment. Economic volatility often makes industrial real estate a safe haven for capital, with owners less likely to part with a major portion of inventory without another secure source to place it.

With fewer portfolio options, investors switched gears in the first half of 2016 to single building or smaller portfolio sales, and expanded their search into growing secondary markets. This includes Cleveland, Columbus, Kansas City and Detroit. These markets are reporting strong demand because of their locations near population centers or inland ports, and all posted year-over-year gains in number of transactions closed. Despite lower transaction volume, the average price PSF finished mid-year at $80 PSF, $10 PSF higher than this time last year. Higher sales prices lowered cap rates to 6.6%, down 10 BPS from this time last year.

Top U.S. Industrial Sales in YTD 2016

ADDRESS MARKET SF PRICE BUYER

200 Old Iron Ore Coad Windsor, CT 1,017,517 $105,500,000 DekaBank

1001 Columbia Avenue Riverside, CA 507,000 $105,000,000 GE Asset Management

3350 Laurel Ridge Avenue Ruskin, FL 1,100,000 $103,600,000 Cole Capital

3003 Woodbridge Avenue Edison, NJ 831,000 $97,300,000 IO Data Centers

One True Temper Drive Carlisle, PA 1,226,525 $90,150,000 Clarion Partners

*Partial Interest Sale Source: Real Capital Analytics

Top U.S. Industrial Leases in YTD 2016

TENANT ADDRESS MARKET SF TENANT INDUSTRY

Mars Candy4005 Cedar Creek

DriveElwood, IL 1,388,000 Wholesaler

Wayfair.com 48-50 Station Road Cranbury, NJ 1,240,967 E-Commerce

Retailer

Wayfair.com 3300 Indian Avenue Perris, CA 1,224,874 E-Commerce

Retailer

Amazon.com555 Orange Show

RoadSan Bernardino,

CA 1,102,639

E-Commerce Retailer

Williams-Sonoma11510 Lewis

Braselton Blvd. Braselton, GA 1,074,596 Retailer

Source: CoStar, Colliers International

U.S. Wholesale vs. Retail Inventories

10.7%

18.5%

23.7% 22.3%

5.5%

10.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Q4 1970-Q4 1973

Q1 1975-Q1 1980

Q4 1982-Q3 1990

Q1 1991-Q1 2001

Q4 2001-Q4 2007

Q3 2009-present

Emp

Gro

wth

GD

P G

row

th



$461 $422

$599

$345 $391

$589

$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600 $625

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

May-1

6

Retail Wholesale

1/3 More in Stores

49.4

77.0

36.0

62.8

7.7%

6.0%

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

Q2 2014 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2

Vaca

ncy

%


$ B

illio

ns

U.S. Industrial Market Q2 2014 to Q2 2016

10.7%

18.5%

23.7% 22.3%

5.5%

10.3%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Q4 1970-Q4 1973

Q1 1975-Q1 1980

Q4 1982-Q3 1990

Q1 1991-Q1 2001

Q4 2001-Q4 2007

Q3 2009-present

Emp

Gro

wth

GD

P G

row

th



$461 $422

$599

$345 $391

$589

$300 $325 $350 $375 $400 $425 $450 $475 $500 $525 $550 $575 $600 $625

Jan-

05

Jan-

06

Jan-

07

Jan-

08

Jan-

09

Jan-

10

Jan-

11

Jan-

12

Jan-

13

Jan-

14

Jan-

15

Jan-

16

May-1

6

Retail Wholesale

1/3 More in Stores

49.4

77.0

36.0

62.8

7.7%

6.0%

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

Q2 2014 Q3 Q4 Q1 2015 Q2 Q3 Q4 Q1 2016 Q2

Vaca

ncy

%


$ B

illio

ns

Source: Colliers International

Source: Bureau of the Census

Sources: Real Capital Analytics, Colliers International

Top 5 MSAs in YTD Transaction Volume

1. Los Angeles $1,930 M

2. Chicago $1,508 M

3. San Jose $1,270 M

4. Boston $1,156 M

5. East Bay $1,005 M

Source: Colliers International

Top 5 MSAs in YTD Net Absorption

1. Chicago 14.3 MSF

2. Inland Empire 10.9 MSF

3. Atlanta 10.5 MSF

4. Dallas-Ft. Worth 9.1 MSF

5. Philadelphia 6.0 MSF

0M 1M 2M 3M 4M 5M 6M 7M 8M 9M 10M 11M 12M 13M 14M 15M 16MQ2 2016 YTD Total New Supply (SF)

0M

1M

2M

3M

4M

5M

6M

7M

8M

9M

10M

11M

12M

13M

14M

15M

Q2 2

016

Abso

rptio

n YT

D (S

F)

L.A., CA Seattle/Puget Sound, WA

Houston, TX

Philadelphia, PA

New Jersey - Northern

Med

ian

Median


3-Month Absorption ForecastPositive

NegativeClose to zero

Port Location

Phoenix, AZ

Inland Empire, CA

Dallas-Ft. Worth, TX

Cincinnati, OH

Chicago, IL

Atlanta, GA

Minneapolis/St. Paul, MN

San Jose - Silicon Valley, CA

New Jersey - Central

Milwaukee, WI

Detroit, MI

Cleveland, OH

-2.8% -2.4% -2.0% -1.6% -1.2% -0.8% -0.4% 0.0% 0.4% 0.8% 1.2%YoY Change in Industrial Vacancy Rate

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

Q2 2

016

Vaca

ncy

Rate

San Jose - Silicon Valley, CANew Jersey - Central

Seattle/Puget Sound, WA

Los Angeles, CA

Cincinnati, OH

Phoenix, AZ

Inland Empire, CA

Dallas-Ft. Worth, TXChicago, IL

Atlanta, GA

Minneapolis/St. Paul, MNHouston, TX

Cleveland, OH

Milwaukee, WIDetroit, MI

Philadelphia, PA


Med

ian

Median


3-Month Vacancy ForecastPositive


Port Location

-2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% 26%YoY Change in Warehouse/Distribution Rent

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

Q2 2

016

War

ehou

se/D

istr

ibut

ion

Spac

e Re

nt ($

PSF)

New Jersey - Central

San Jose - Silicon Valley, CA

Seattle/Puget Sound, WA

Los Angeles, CA

Phoenix, AZ Inland Empire, CA

Cincinnati, OH

Minneapolis/St. Paul, MN

Dallas-Ft. Worth, TX

Chicago, IL

Atlanta, GA

Houston, TX

Detroit, MI

Cleveland, OHMilwaukee, WI

Philadelphia, PA


Med

ian

Median


3-Month Rent ForecastPositive


Port Location


Warehouse Rent Forecast by Port Location (Largest 20 Markets) Expected Change in Rent Over Next 3 Months

Vacancy Forecast by Port Location (Largest 20 Markets) Expected Vacancy Over Next 3 Months

Absorption Forecast by Port Location (Largest 20 Markets) Expected Absorption Over Next 3 Months

Source: Colliers Q2 2016 Industrial SurveySource: Colliers Q2 2016 Industrial Survey

Source: Colliers Q2 2016 industrial survey

Industrial Real Estate Outlook

Consumer spending is a major driver of industrial real estate and will be shaped by how much e-commerce grows and how long demand lasts. Weak GDP numbers bear watching, but strong job growth in Q2 is a positive sign that consumer demand will likely continue for the foreseeable future. We expect this demand to keep imports robust in the coming quarters, as exports face headwinds due to a strong dollar and weakening international economic fundamentals.

The Panama Canal expansion was completed in Q2, but its effect on port volumes and industrial real estate will take time to manifest. Many East Coast ports are in the midst of programs to improve infrastructure before they can handle larger ships crossing the canal. The demand uptick in many East Coast port markets is a sign that occupiers foresee an increase in inventories passing through the ports in the coming year. However, West Coast ports and the industrial markets that support them are not expected to slow. The natural deep harbors and infrastructure improvements in these markets along with a growing population, will likely keep goods flowing at a robust pace for the foreseeable future.

Wholesaler demand is something to watch in the coming quarters. Retailers are increasingly taking online orders and having wholesalers ship directly from their warehouses. Moreover, many wholesalers are looking to sell directly to customers, further increasing demand for industrial real estate. Consumer demands for next-day and same-day delivery will push the need for industrial real estate higher. Inland port markets and secondary markets near population centers will likely see the largest increase in demand with core markets continuing to thrive for the remainder of 2016.


United States | Industrial Survey | Inventory, New Supply, Under Construction

MARKET INVENTORY (SF) JUN 30, 2016

SPECULATIVE NEW SUPPLY Q2 2016 (SF)

TOTAL NEW SUPPLY Q2 2016 (SF)

SPECULATIVE UNDER CONSTRUCTION (SF)

TOTAL UNDER CONSTRUCTION (SF)

NORTHEAST

Baltimore, MD 238,561,144 31,798 335,698 413,100 1,052,916

Hartford, CT 95,613,351 0 0 0 0

Long Island, NY 157,179,100 125,000 125,000 366,912 366,912

New Hampshire 61,640,526 0 0 0 0

New Jersey - Central 315,733,821 0 0 3,107,352 3,107,352

New Jersey - Northern 362,934,131 0 0 2,373,510 3,239,765

Philadelphia, PA 427,680,568 1,762,500 2,778,343 5,449,250 8,724,983

Pittsburgh, PA 179,237,359 45,000 56,150 1,060,944

Shenandoah Valley, MD-VA-WV 102,184,282 430,050 781,050 20,000 1,594,673

Washington, D.C. 228,705,047 338,850 1,103,140 966,863 2,848,049

Northeast Total 2,340,799,028 2,733,198 5,565,381 12,696,987 23,057,449

SOUTH

Atlanta, GA 645,213,532 2,695,240 4,200,841 11,111,542 17,325,856

Austin, TX 68,566,131 72,000 72,000 178,885 1,644,600

Birmingham, AL 107,102,000 0 0 0 428,000

Charleston, SC 35,357,005 212,000 212,000 999,243 3,903,243

Charlotte, NC 346,929,435 725,553 4,312,998

Columbia, SC 86,559,621 120,500 120,500 0 1,313,000

Dallas-Ft. Worth, TX 775,601,024 4,132,639 5,320,901 20,012,402 22,028,848

Ft. Lauderdale-Broward, FL 112,712,861 29,952 29,952 755,352 755,352

Greenville/Spartanburg, SC 193,149,044 300,182 3,000,182 1,002,456 4,521,456

Houston, TX 523,577,141 1,359,221 2,571,221 6,499,195 11,936,070

Huntsville, AL 54,890,549 0 0 0 630,000

Jacksonville, FL 124,909,413 0 25,676 0 123,201

Louisville, KY 191,580,113 947,890 4,072,887

Memphis, TN 233,313,736 0 0 1,518,840 3,762,420

Miami, FL 216,777,234 723,524 723,524 2,397,088 2,397,088

Nashville, TN 193,044,818 0 1,988,240 0 0

Norfolk, VA 91,358,947 37,000 37,000 0 419,066

Orlando, FL 136,707,038 0 171,479 0 749,042

Raleigh, NC 113,466,901 156,000 892,577

Richmond, VA 114,593,257 21,600 21,600 0 0

Savannah, GA 47,955,950 475,000 475,000 582,000 2,282,000

Tampa Bay, FL 203,559,319 1,038,073 1,038,073 3,502,367 3,502,367

West Palm Beach, FL 51,726,266 104,551 104,551 1,093,681 1,093,681

South Total 4,713,927,245 11,321,482 21,942,183 49,653,051 88,093,752

Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals.

7 United States Research Report | Q2 2016 | Industrial Market Outlook | Colliers International7

United States | Industrial Survey | Inventory, New Supply, Under Construction

MARKET INVENTORY (SF) JUN 30, 2016

SPECULATIVE NEW SUPPLY Q2 2016 (SF)

TOTAL NEW SUPPLY Q2 2016 (SF)

SPECULATIVE UNDER CONSTRUCTION (SF)

TOTAL UNDER CONSTRUCTION (SF)

MIDWEST

Chicago, IL 1,345,504,375 2,846,697 4,634,312 9,300,878 16,758,838

Cincinnati, OH 250,586,171 0 1,121,560 3,587,057 4,119,557

Cleveland, OH 395,714,105 114,188 552,142 435,840 1,146,045

Columbus, OH 227,856,640 768,590 966,590 1,016,064 3,591,064

Dayton, OH 104,467,094 0 180,000 60,000 594,000

Detroit, MI 535,305,474 0 154,318 2,783,299 2,783,299

Indianapolis, IN 235,015,864 508,000 1,225,139 1,504,312 2,329,603

Kansas City, MO-KS 243,552,484 1,866,398 1,866,398 6,446,886 7,016,886

Milwaukee, WI 250,061,648 589,585 814,610 776,572 2,110,736

Minneapolis/St. Paul, MN 245,853,578 122,400 465,188 1,227,874 3,110,678

Omaha, NE 68,638,408 12,000 12,000 437,644 600,644

St. Louis, MO 228,333,341 263,000 2,313,324 1,480,533 4,207,533

Midwest Total 4,245,123,257 7,090,858 14,499,701 29,131,959 48,714,883

WEST

Bakersfield, CA 37,836,001 0 86,000 149,520 273,520

Denver, CO 223,296,782 1,771,924 1,771,924 2,658,022 3,575,505

Fairfield, CA 49,553,552 64,350 156,350 1,360,651 1,360,651

Fresno, CA 68,797,738 45,807 45,807 0 0

Honolulu, HI 39,773,648 0 0 0 0

Las Vegas, NV 122,072,830 661,726 661,726 1,925,708 1,940,708

Los Angeles - Inland Empire, CA 477,733,400 2,931,000 10,147,100 8,449,300 11,087,300

Los Angeles, CA 896,585,300 731,300 731,300 3,650,100 3,650,100

Oakland, CA 143,409,822 0 0 637,938 637,938

Orange County, CA 182,795,900 379,200 379,200 41,700 41,700

Phoenix, AZ 290,140,880 657,654 1,042,031 1,575,678 2,844,799

Pleasanton/Tri-Valley, CA 18,668,998 1,298,207 1,298,207 0 633,566

Portland, OR 198,885,508 418,188 2,871,451

Reno, NV 88,597,499 0 0 8,915,774

Sacramento, CA 164,401,642 0 0 0 0

San Diego, CA 188,475,815 121,970 139,920 1,117,475 1,698,858

San Francisco Peninsula, CA 39,505,720 0 0 0 0

San Jose - Silicon Valley, CA 249,939,618 671,837 671,837 684,424 1,059,424

Seattle/Puget Sound, WA 270,676,522 620,373 1,920,373 1,100,000 1,100,000

Stockton/San Joaquin County, CA 102,017,749 0 1,274,553 1,909,641 1,909,641

Walnut Creek, CA 17,703,948 0 0 15,240 15,240

West Total 3,954,628,824 9,955,348 20,744,516 25,275,397 43,628,175

U.S. TOTALS 15,254,478,354 31,100,886 62,751,781 116,757,394 203,494,259

(continued)



United States | Industrial Survey | Absorption, Vacancy

MARKET ABSORPTION Q2 2016 (SF)

YTD ABSORPTION

VACANCY RATE MAR 31, 2015

VACANCY RATE JUN 30, 2016

CHANGE IN VACANCY

NORTHEAST

Baltimore, MD 699,287 2,582,842 9.2% 8.9% -0.3%

Hartford, CT 701,686 1,082,336 6.8% 6.1% -0.7%

Long Island, NY 213,584 245,119 3.5% 3.4% -0.1%

New Hampshire 125,145 709,578 7.2% 7.0% -0.2%

New Jersey - Central 553,041 2,623,209 5.2% 4.5% -0.7%

New Jersey - Northern 2,039,050 3,383,063 6.3% 5.5% -0.8%

Philadelphia, PA 3,167,697 6,041,398 7.9% 7.7% -0.1%

Pittsburgh, PA 1,096,191 1,942,927 6.0% 5.4% -0.6%

Shenandoah Valley, MD-VA-WV 147,425 312,419 8.4% 9.1% 0.7%

Washington, D.C. 1,225,552 2,768,038 9.1% 9.0% -0.1%

Northeast Total 8,637,404 21,690,929 7.8% 7.5% -0.3%

SOUTH

Atlanta, GA 6,578,417 10,506,916 8.0% 7.6% -0.4%

Austin, TX 202,041 262,898 5.6% 5.4% -0.2%

Birmingham, AL 307,080 380,726 9.4% 9.1% -0.3%

Charleston, SC 169,618 1,076,374 6.9% 7.0% 0.1%

Charlotte, NC 957,901 1,147,101 8.1% 8.0% -0.1%

Columbia, SC 429,872 557,504 9.0% 8.7% -0.4%

Dallas-Ft. Worth, TX 2,759,719 9,088,031 6.7% 7.0% 0.3%

Ft. Lauderdale-Broward, FL 514,590 925,321 6.1% 5.6% -0.5%

Greenville/Spartanburg, SC 3,791,955 4,919,309 7.6% 7.1% -0.5%

Houston, TX 629,113 1,199,455 5.2% 5.5% 0.3%

Huntsville, AL -67,652 385,487 5.8% 6.0% 0.1%

Jacksonville, FL 960,129 2,798,219 6.1% 5.4% -0.7%

Louisville, KY 943,751 2,243,789 5.1% 5.1% 0.0%

Memphis, TN 1,032,223 3,401,862 8.8% 8.4% -0.3%

Miami, FL 372,783 1,006,790 4.4% 4.6% 0.1%

Nashville, TN 1,433,346 3,365,695 4.4% 4.7% 0.2%

Norfolk, VA 458,461 257,474 6.7% 6.3% -0.5%

Orlando, FL 967,873 1,790,446 7.2% 6.6% -0.6%

Raleigh, NC 726,125 1,047,609 6.8% 6.3% -0.5%

Richmond, VA 33,095 530,566 8.3% 8.2% -0.1%

Savannah, GA 829,130 1,729,880 3.2% 1.9% -1.3%

Tampa Bay, FL 595,691 1,437,900 7.1% 7.3% 0.2%

West Palm Beach, FL 218,507 505,809 5.3% 5.0% -0.2%

South Total 25,236,929 50,958,322 6.8% 6.7% -0.1%



United States | Industrial Survey | Absorption, Vacancy

MARKET ABSORPTION Q2 2016 (SF)

YTD ABSORPTION

VACANCY RATE MAR 31, 2015

VACANCY RATE JUN 30, 2016

CHANGE IN VACANCY

MIDWEST

Chicago, IL 5,276,979 14,323,128 7.1% 6.9% -0.1%

Cincinnati, OH 2,748,242 3,281,498 4.9% 4.2% -0.7%

Cleveland, OH 1,336,492 1,692,441 5.6% 5.3% -0.3%

Columbus, OH 440,487 1,886,389 6.1% 6.1% 0.0%

Dayton, OH 224,562 679,467 7.0% 6.9% -0.1%

Detroit, MI 3,193,198 5,349,748 4.4% 4.0% -0.4%

Indianapolis, IN 2,830,534 5,061,354 7.4% 6.7% -0.7%

Kansas City, MO-KS 1,217,128 1,623,272 6.4% 6.6% 0.2%

Milwaukee, WI 1,167,242 1,890,215 4.2% 4.1% -0.2%

Minneapolis/St. Paul, MN 992,541 1,623,930 6.0% 5.8% -0.2%

Omaha, NE 37,808 22,811 3.1% 3.1% 0.0%

St. Louis, MO 1,807,772 1,669,764 6.9% 6.9% 0.0%

Midwest Total 21,383,023 39,104,017 6.1% 5.8% -0.2%

WEST

Bakersfield, CA -176,210 230,427 3.9% 4.6% 0.7%

Denver, CO 1,129,509 1,118,529 4.2% 4.4% 0.2%

Fairfield, CA 306,786 268,750 6.5% 6.2% -0.3%

Fresno, CA -373,923 524,864 3.7% 4.3% 0.6%

Honolulu, HI 61,411 129,093 1.5% 1.3% -0.2%

Las Vegas, NV 700,229 1,330,552 5.9% 5.9% -0.1%

Los Angeles - Inland Empire, CA 6,558,900 10,906,300 4.5% 4.8% 0.3%

Los Angeles, CA 1,471,600 2,237,500 1.4% 1.4% 0.0%

Oakland, CA 431,017 827,371 2.1% 1.8% -0.3%

Orange County, CA 428,400 574,200 3.0% 3.0% 0.0%

Phoenix, AZ 864,761 2,637,651 10.7% 10.8% 0.1%

Pleasanton/Tri-Valley, CA 1,025,392 1,346,016 2.5% 3.7% 1.3%

Portland, OR 971,122 1,422,716 5.0% 4.7% -0.3%

Reno, NV 170,633 123,278 8.9% 8.7% -0.2%

Sacramento, CA 993,614 1,432,963 10.2% 9.6% -0.6%

San Diego, CA 294,137 251,177 4.9% 4.8% -0.1%

San Francisco Peninsula, CA 417,860 272,982 2.7% 1.3% -1.5%

San Jose - Silicon Valley, CA 824,552 150,008 5.2% 5.0% -0.2%

Seattle/Puget Sound, WA 2,472,820 2,228,806 4.1% 3.7% -0.4%

Stockton/San Joaquin County, CA 3,086,711 4,619,906 8.0% 6.2% -1.8%

Walnut Creek, CA 298,254 81,058 8.9% 7.3% -1.7%

West Total 21,791,301 32,714,147 4.6% 4.5% -0.1%

U.S. TOTALS 77,048,657 144,467,415 6.2% 6.0% -0.2%

(continued)



United States | Industrial Survey | 3-Month Forecasts, Sales Price, Cap Rates

MARKET VACANCY FORECAST (3 MONTHS)**

RENT FORECAST (3 MONTHS)**

ABSORPTION FORECAST (3 MONTHS)**

AVERAGE SALES PRICE (USD/SF) AVERAGE CAP RATE

NORTHEAST

Baltimore, MD Down Same Positive $60 8.3%

Hartford, CT Same Same Close to zero $38 8.5%

Long Island, NY Down Up Positive $90 8.3%

New Hampshire Down Same Positive

New Jersey - Central Down Up Positive $91 6.0%

New Jersey - Northern Down Up Positive $81

Philadelphia, PA Down Up Positive $81 6.1%

Pittsburgh, PA Same Up Positive $57 7.8%

Shenandoah Valley, MD-VA-WV Down Same Positive $75 7.0%

Washington, D.C. Down Same Positive $137 9.3%

Northeast Average* $79 7.6%

SOUTH

ATLANTA, GA Same Same Positive $52 7.4%

Austin, TX Down Up Positive $87 6.8%

Birmingham, AL Down Same Positive $49 7.4%

Charleston, SC Down Same Positive $44

Charlotte, NC N/A N/A N/A

Columbia, SC Down Up Positive $14

Dallas-Ft. Worth, TX Same Same Positive $55 7.4%

Ft. Lauderdale-Broward, FL Down Up Positive $94 4.0%

Greenville/Spartanburg, SC Down Up Positive $29

Houston, TX Up Up Positive $71 7.9%

Huntsville, AL Same Same Close to zero

Jacksonville, FL Down Same Positive $45 8.0%

Louisville, KY Up N/A Positive

Memphis, TN Down Up Positive

Miami, FL Up Up Negative $78 7.0%

Nashville, TN Same Same Positive $51 7.6%

Norfolk, VA Down Same Positive $65 8.0%

Orlando, FL Down Up Positive $83 7.0%

Raleigh, NC Down Same Positive $70 8.0%

Richmond, VA Down Up Close to zero $41 7.6%

Savannah, GA Same Up Positive $45 7.0%

Tampa Bay, FL Down Up Positive $67 7.0%

West Palm Beach, FL Same Up Positive $75 7.5%

South Average* $59 7.3%

Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals.* Straight averages used** Forecasts for warehouse space


United States | Industrial Survey | 3-Month Forecasts, Sales Price, Cap Rates

MARKET VACANCY FORECAST (3 MONTHS)**

RENT FORECAST (3 MONTHS)**

ABSORPTION FORECAST (3 MONTHS)**

AVERAGE SALES PRICE (USD/SF) AVERAGE CAP RATE

MIDWEST

Chicago, IL Same Same Positive $65 5.2%

Cincinnati, OH Up Up Positive $43 7.5%

Cleveland, OH Same Up Positive $47

Columbus, OH Same Up Positive $36 6.8%

Dayton, OH Same Up Close to zero $45

Detroit, MI Down Up Positive $37 9.7%

Indianapolis, IN Down Up Positive $50 6.5%

Kansas City, MO-KS Up Up Positive $75 7.6%

Milwaukee, WI Down Same Positive $60 7.5%

Minneapolis/St. Paul, MN Down Same Positive $97

Omaha, NE Same Up Close to zero

St. Louis, MO Same Same Positive $45 7.0%

Midwest Average* $55 7.2%

WEST

Bakersfield, CA Up Same Close to zero $42 10.0%

Denver, CO Up Up Positive $93 7.0%

Fairfield, CA Same Up Close to zero $97 6.2%

Fresno, CA Same Same Positive $40

Honolulu, HI Down Up Positive

Las Vegas, NV Down Same Positive $123

Los Angeles - Inland Empire, CA Same Up Positive $96 6.3%

Los Angeles, CA Same Up Close to zero $129 5.5%

Oakland, CA Down Up Close to zero $105 4.8%

Orange County, CA Same Same Close to zero $125 5.2%

Phoenix, AZ Same Up Positive $79 7.5%

Pleasanton/Tri-Valley, CA Same Up Positive $120

Portland, OR Down Up Positive $88 5.5%

Reno, NV Up N/A Positive

Sacramento, CA Down Up Positive $73 7.9%

San Diego, CA Down Up Positive $138 6.1%

San Francisco Peninsula, CA Same Same Close to zero $303

San Jose - Silicon Valley, CA Same Same Positive $212 6.4%

Seattle/Puget Sound, WA Same Up Positive $204 5.9%

Stockton/San Joaquin County, CA Down Same Positive

Walnut Creek, CA Down Up Positive

West Average* $123 6.6%

U.S. AVERAGE* $82 7.1%

(continued)

Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals.* Straight averages used** Forecasts for warehouse space


United States | Industrial Survey | Average Asking NNN Rents as of June 2016

MARKETWAREHOUSE /

DISTRIBUTION SPACE (USD/SF/YR)

BULK SPACE (USD/SF/YR)

FLEX / SERVICE SPACE (USD/SF/YR)

TECH / R&D SPACE (USD/SF/YR)

NORTHEAST

Baltimore, MD $5.24 $4.60 $9.96 $16.66

Hartford, CT $3.95 $5.88 $7.71 $6.50

Long Island, NY $10.25 $10.25 $9.41

New Hampshire $5.55 $6.38 $9.68

New Jersey - Central $5.43 $5.03 $11.37

New Jersey - Northern $6.51 $6.19 $10.07

Philadelphia, PA $4.85 $4.95 $7.75 $11.25

Pittsburgh, PA $4.96 $5.51 $11.57 $11.57

Shenandoah Valley, MD-VA-WV $3.80 $3.08 $5.85 $11.25

Washington, D.C. $7.97 $7.37 $12.12 $13.00

Northeast Average* $5.90 $5.88 $9.05 $12.03

SOUTH

ATLANTA, GA $3.69 $3.53 $8.03 $11.13

Austin, TX $9.37 $7.58 $11.00 $31.18

Birmingham, AL $4.61 $3.49 $8.56

Charleston, SC $4.89 $4.88 $13.07

Charlotte, NC $3.98 $4.07 $8.64

Columbia, SC $3.07 $3.41 $7.34

Dallas-Ft. Worth, TX $3.65 $2.95 $7.80 $9.15

Ft. Lauderdale-Broward, FL $8.25 $7.35 $10.96 $7.84

Greenville/Spartanburg, SC $3.41 $3.83 $7.45

Houston, TX $6.87 $5.37 $11.64 $12.27

Huntsville, AL $8.44 $4.16 $7.74

Jacksonville, FL $4.34 $3.77 $9.71

Louisville, KY $3.78 $3.81 $6.69

Memphis, TN $2.68 $2.84 $5.61 $9.75

Miami, FL $10.65 $7.90 $16.00 $9.42

Nashville, TN $4.98 $3.42 $9.35 $9.34

Norfolk, VA $4.81 $4.62 $8.58 $11.35

Orlando, FL $5.39 $4.92 $9.42 $13.27

Raleigh, NC $4.59 $4.27 $12.02 $16.52

Richmond, VA $3.73 $3.77 $8.44 $10.38

Savannah, GA $3.95 $3.80 $7.25 $10.00

Tampa Bay, FL $4.92 $4.46 $8.38 $4.92

West Palm Beach, FL $9.07 $7.01 $12.00 $8.20

South Average* $5.28 $4.51 $9.25 $11.65

Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals.* Straight averages used


United States | Industrial Survey | Average Asking NNN Rents as of June 2016

MARKETWAREHOUSE /

DISTRIBUTION SPACE (USD/SF/YR)

BULK SPACE (USD/SF/YR)

FLEX / SERVICE SPACE (USD/SF/YR)

TECH / R&D SPACE (USD/SF/YR)

MIDWEST

Chicago, IL $4.68 $4.53 $9.50

Cincinnati, OH $3.62 $3.34 $6.75 $6.75

Cleveland, OH $3.86 $3.86 $7.32 $7.32

Columbus, OH $2.95 $2.95 $5.93 $5.95

Dayton, OH $2.84 $2.99 $4.97 $4.97

Detroit, MI $4.74 $4.10 $8.43 $8.66

Indianapolis, IN $3.49 $3.50 $6.23

Kansas City, MO-KS $4.51 $4.09 $8.35 $7.58

Milwaukee, WI $3.99 $3.75 $5.07

Minneapolis/St. Paul, MN $5.00 $4.72 $6.95 $7.41

Omaha, NE $4.80 $4.78 $6.04 $4.71

St. Louis, MO $3.84 $3.51 $7.10 $8.50

Midwest Average* $3.94 $3.77 $6.72 $6.65

WEST

Bakersfield, CA $4.00 $3.40 $8.40

Denver, CO $7.27 $6.51 $10.03 $11.44

Fairfield, CA $5.84 $5.67 $7.28 $9.32

Fresno, CA $4.25 $2.92 $7.89 $7.89

Honolulu, HI $13.51

Las Vegas, NV $6.60 $6.13 $7.56 $9.96

Los Angeles - Inland Empire, CA $5.96 $5.14 $7.45 $8.05

Los Angeles, CA $7.80 $6.25 $10.35 $13.33

Oakland, CA $7.80 $7.56 $9.12 $20.64

Orange County, CA $8.68 $7.79 $14.85 $11.33

Phoenix, AZ $6.27 $5.03 $12.53 $12.74

Pleasanton/Tri-Valley, CA $6.60 $6.60

Portland, OR $6.08 $5.57 $11.67 $10.34

Reno, NV $4.41 $3.93 $7.87

Sacramento, CA $5.04 $3.48 $8.76 $8.28

San Diego, CA $9.60 $8.64 $12.96 $18.48

San Francisco Peninsula, CA $12.60 $13.44 $33.24 $33.24

San Jose - Silicon Valley, CA $10.08 $7.04 $13.80 $22.92

Seattle/Puget Sound, WA $6.79 $5.36 $15.98 $15.44

Stockton/San Joaquin County, CA $4.68 $4.68 $6.60 $5.88

Walnut Creek, CA $5.04 $11.04 $13.32

West Average* $6.92 $5.94 $11.12 $13.06

U.S. AVERAGE* $5.66 $5.01 $9.31 $11.26

(continued)

Note: The detail for markets with older data has been removed, but the numbers they contribute remain in the totals.* Straight averages used


MARKET VACANCY RATE JUN 30, 2016

San Francisco Peninsula, CA 1.3%

Honolulu, HI 1.3%

Los Angeles, CA 1.4%

Oakland, CA 1.8%

Savannah, GA 1.9%

Orange County, CA 3.0%

Omaha, NE 3.1%

Long Island, NY 3.4%

Seattle/Puget Sound, WA 3.7%

Pleasanton/Tri-Valley, CA 3.7%

Detroit, MI 4.0%

Milwaukee, WI 4.1%

Cincinnati, OH 4.2%

Fresno, CA 4.3%

Denver, CO 4.4%

New Jersey - Central 4.5%

Bakersfield, CA 4.6%

Miami, FL 4.6%

Nashville, TN 4.7%

Portland, OR 4.7%

Los Angeles - Inland Empire, CA 4.8%

San Diego, CA 4.8%

San Jose - Silicon Valley, CA 5.0%


West Palm Beach, FL 5.0%

Louisville, KY 5.1%

Cleveland, OH 5.3%

Austin, TX 5.4%

Jacksonville, FL 5.4%

Pittsburgh, PA 5.4%

New Jersey - Northern 5.5%

Houston, TX 5.5%

Ft. Lauderdale-Broward, FL 5.6%

Minneapolis/St. Paul, MN 5.8%

Las Vegas, NV 5.9%

Huntsville, AL 6.0%

U.S. AVERAGE 6.0%

Hartford, CT 6.1%

Columbus, OH 6.1%

Fairfield, CA 6.2%

Stockton/San Joaquin County, CA 6.2%

Norfolk, VA 6.3%

Raleigh, NC 6.3%

Orlando, FL 6.6%

Kansas City, MO-KS 6.6%

Indianapolis, IN 6.7%

Chicago, IL 6.9%


Dayton, OH 6.9%

St. Louis, MO 6.9%

Charleston, SC 7.0%

New Hampshire 7.0%

Dallas-Ft. Worth, TX 7.0%

Greenville/Spartanburg, SC 7.1%

Walnut Creek, CA 7.3%

Tampa Bay, FL 7.3%

Atlanta, GA 7.6%

Philadelphia, PA 7.7%

Charlotte, NC 8.0%

Richmond, VA 8.2%

Memphis, TN 8.4%

Columbia, SC 8.7%

Reno, NV 8.7%

Baltimore, MD 8.9%

Washington, D.C. 9.0%

Shenandoah Valley, MD-VA-WV 9.1%

Birmingham, AL 9.1%

Sacramento, CA 9.6%

Phoenix, AZ 10.8%

U.S. | Vacancy Rankings


Copyright © 2016 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. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.

Colliers International865 S. Figueroa Street, Suite 3500 Los Angeles, CA 90017+1 213 627 1214colliers.com

INDUSTRIAL SERVICES CONTACTDwight Hotchkiss

President, Brokerage Services | USANational Director, Industrial | USA

+1 213 532 [email protected]

RESEARCH CONTACTSJames Breeze

National Director of Industrial Research | USA+1 909 937 6365

[email protected]

Pete Culliney Director of Research | Global

+1 212 716 3689 [email protected]

CONTRIBUTORSJeff Simonson

U.S. Senior Research Analyst | USA

AJ Paniagua U.S. Research Analyst | USA

Andrew Nelson Chief Economist | USA

GlossaryBulk Space – Warehouse space 100,000 square feet or more with minimum ceiling heights of 24 feet. All loading is dock-height.

Flex Space – Single-story build-ings having 10- to 18-foot ceilings with both floor-height and dock-height loading. Includes wide variation in office space utilization, ranging from retail and personal service, to distribution, light industrial and occasional heavy industrial use.

Service Space – Single-story (or mezzanine) with 10- to 16-foot ceilings with frontage treatment on one side and dock-height loading or grade-level roll-up doors on the other. Less than 15% office space.

Tech/R&D – One and two-story, 10- to 15-foot ceiling heights with up to 50% office/dry lab space (remainder in wet lab, workshop, storage and other support), with dock-height and floor-height loading.

Warehouse – 50,000 square feet or more with up to 15 % office space, the balance being general warehouse space with 18- to 30-foot ceiling heights. All loading is dock-height.

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