CB Richard Ellis

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N A

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Owner, Developer, Investor Summit

Denver Industrial Market Update

Paul Kluck, SIOR

CB Richard Ellis

Denver Industrial Market

QUICK FACTS

± 224 Million Square Feet (Year 2000 ± 211 Million Square Feet)

22nd Largest Industrial Market

2nd Tier Distribution Market – (1st Tier Chicago, New Jersey,

Dallas, Los Angeles)

Center of the Rocky Mountain Region

Large Geographic Area/Small Population

Denver CSA Population: 2.75 Million

Key Location for National Users

QUICK FACTS

± 224 Million Square Feet (Year 2000 ± 211 Million Square Feet)

22nd Largest Industrial Market

2nd Tier Distribution Market – (1st Tier Chicago, New Jersey,

Dallas, Los Angeles)

Center of the Rocky Mountain Region

Large Geographic Area/Small Population

Denver CSA Population: 2.75 Million

Key Location for National Users

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Regional Distribution: Percentage of U.S. Population Reached Within 500 Miles

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Industrial Supply & Demand Trends Metro Denver

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

MS

F

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Va

ca

nc

y

Completions Net Absorption Vacancy

Forecast

CB Richard Ellis

Industrial Market Comparison | 2009

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

Denver Phoenix Las Vegas

Vacancy Rate (%)

Net Negative Absorption (- MSF)

-332,911 SF

-4,649,352 SF

-1,589,020 SF

7.2%

16.1%

10.2%

“We’re Not as Bad as Phoenix and Vegas”

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360,000 Square Feet

O’Reilly Automotive

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Anheuser-Busch

119,116 Square Feet

Anheuser-Busch / MBM

MBM

110,000 Square Feet

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O’Reilly Automotive 360,000 Colorado Petroleum 230,636 SMA Solar 167,000 GE 152,000 Kevry Corp 135,246 Best Buy 130,000 Anheuser-Busch 119,116 MBM 115,000 Metech 112,000 Fusion Specialties 112,000

MAJOR TRANSACTIONS – USER SALES AND LEASES

Denver Industrial Market | 2009

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4801-4885 Moline St.

97,870 SF Class B Warehouse

100% Leased

Cobalt Industrial REIT / ProLogis

11175 E 55th Ave.

237,400 SF Class B Warehouse

100% Leased

14303 E Moncrieff Pl.

164,364 SF Class B Warehouse

100% Leased

Multi-Property Sale on 12/10/09 for $18,525,000 ($37.08/SF)

CB Richard Ellis

Industrial Investment Market Trends | 2009

Annual Sales Denver

$-

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

2005 2006 2007 2008 2009

000'

s

CAP RATES

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%

9.5%

10.0%

2003 2004 2005 2006 2007 2008 2009 2010

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Major Development Plans | 2010Developer Sq. Ft.

0

0

0

0

0

0

0

0

0

Total 0

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Phase I - RecoveryPhase I - Recovery

Phase II - ExpansionPhase II - Expansion Phase III - HypersupplyPhase III - Hypersupply

Phase IV - RecessionPhase IV - Recession

•Declining Vacancy•New Construction•Rent Growth

•Increasing Vacancy•New Construction•Rent Growth Positive but Declining

•Increasing Vacancy•More Completions•Rent Growth Negative or <Inflation Rate

•Declining Vacancy•Limited Construction•Rent Growth Negative or <Inflation Rate

Industrial Brokerage Group

Where are we in the Industrial Cycle?

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• Downward Pressure On Pricing– Lease Rates– Sale Prices– Land Prices

• Flight to Quality– Low lease rates drive

demand to Class A space

• Shrinking Demand– Class B and C

• Blend and Extend– Early Renewals

• Short Term Leases

• Extended Deal Cycle

Industrial Market Trends | 2009

Flight to Quality - Class A Vacancy

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

2006 2007 2008 2009

Year

Vac

ancy

Rat

e (%

)

CB Richard Ellis

Industrial Market Predictions | 2010

New Construction

Lease Rates

Absorption

Vacancy

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Presented by

Jim Bolt

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Two-Buck Kluck’s 2010 Forecast

2010 Will Suck Less than 2009