2010 Recap Third consecutive year of negative

absorption

Warehouse/distribution vacancy stabilized

Construction remained nonexistant

INDUSTRIAL

IndustrialEd Brown, CCIM, SIORNAI Carolantic Realty

2011 Triangle NC-CCIM Commercial Real Estate Market Forecast

Networking. Education. Technology.

TRIANGLE INDUSTRIAL OVERVIEWEd Brown, SIOR, CCIMNAI Carolantic Realty

March 16, 2011

LOOK BACK TODAY PREDICITIONS

1996 4Q

1997 4Q

1998 4Q

1999 4Q

2000 4Q

2001 4Q

2002 4Q

2003 4Q

2004 4Q

2005 4Q

2006 4Q

2007 4Q

2008 4Q

2009 4Q

2010 4Q

10.61%11.50%

18.40%

11.90%

13.80%

19.60%21.00%

27.20%

25.30%

20.90%

12.50%

14.80%

17.30%

20.30% 20.80%

WAREHOUSE VACANCY

SUBLEASE SPACE

2001 4Q

2002 4Q

2003 4Q

2004 4Q

2005 4Q

2006 4Q

2007 4Q

2008 4Q

2009 4Q

2010 4Q

883,000

669,000

163,000219,000 224,000

438,000

1,446,000

876,000

1,300,000

824,000

ABSORPTION

Series1139,000

342,000 338,000

141,000257,000

1,830,000

265,000

278,000

58,000179,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q

LEASING ACTIVITY IN THE THREE LARGEST SUBMARKETS

Series1

894,687

248,145

303,571

151,374

61,302

743,677

181,232

88,770107,614

45,053

87,130179,261

20,857

565,831

34,094

RTP EAST WAKE NORTH RALEIGH/US1

2006 2007 2008 2009 2010

2005 4Q 2006 4Q Empire

2007 4Q Sweet Paper

(80k)

2008 4Q Owens & Minor

2009 4Q Impulse

2010 4Q Impulse

0

235,000

100,000

150,000

260,000

50,000

CONSTRUCTIONNO SPEC – ALL BUILD TO SUIT

ADVERTISED RENTAL RATESAnnualized

2000 2005 2010 Increase

900 Aviation Pkwy (30’) $3.75 $3.50 $4.00 0.67%

Edinburgh Place (30’) $4.10 $4.10 $5.25 2.8%

Bedford Place (30’) $4.50 $3.75 $5.25 1.7%

Tri-Center SouthVIII (30’) $4.25 $4.25 $4.95 1.6%

Tri-Center South II (24’) $3.90 $3.75 $4.75 2.2%

Keystone A (24’) $4.15 $3.50 $4.50 0.8%

Walnut Creek III (24’) N/A $4.55 $4.95 2.0%

Greenfield 800 (30’) N/A $4.25 $4.95 3.3%

1.88%

AVERAGE

TRIANGLE INDUSTRIAL OVERVIEW

LOOK BACK TODAY PREDICITIONS

Ed Brown, SIOR, CCIMNAI Carolantic Realty

March 16, 2011

TOTAL VACANCY & SIZE

DESCRIPTION %VACANT SIZE/VACANT

Total Direct 20.8% 25.3m / 5.2 m

Total w/o Durham Tobacco 17.7% 24.1m / 4.3 m

Direct & Sublease 24.1% 25.3m / 6.1 m

SUBMARKET VACANCY & SIZEDESCRIPTION %VACANT SIZE/

VACANT

Largest Submarket – RTP 9.3% 10.3m / 960k

2nd Largest Submarket – East Wake 24.6% 5.2m / 1.2m

3rd Largest Submarket – North Raleigh/US1 34.1% 3.9m / 1.3m

Lower Costs / Trade UpMOVE OUT OF MOVE IN TO

Beavex $6.95/sf Flex to $4.50/sf Warehouse31,000SF

Eaton $6.95/sf Flex to $4.50/sf Warehouse42,000SF

Coca-Cola 1950’s Facility to Modern 30’ Clear250,000SF

Document Storage Old 18’ Clear to Modern 30’ Clear100,000SF

Equipment Rental $7.50/sf Flex to $3.75/sf Warehouse40,000sf

MARKET ACTIVITY USE LATERAL MOVE NEW ABSORPTION ODDS

Document Storage 100,000sf 90%

Equipment 60,000sf 70%

Rental Co. 40,000sf 80%

Printing 70,000sf 60%

Medical 60,000sf 90%

Food 70,000sf 60%

Electronics 40,000sf 70%

Manufacturer 20,000sf 80%

Furniture 60,000sf 90%

200,000sf 320,000sf

NEGATIVE ASORPTION 2011Keystone 88,000sf

Two tenants downsize

Imperial Center 40,000sf Closes

180,000sf New Sublease

Tri-Center South 85,000sf Sublease goes direct

32,000sf move to Creedmoor

Tri-Center North 170,000sf direct to shadow space

Weck Drive 168,000sf recycler downsizes

2100 Harrod 89,000sf moves out

681,000sf

BUILDING SALES COMPS

Address Size $/SF Date

8605 Ebenezer ChurchRaleigh, NC 81,600sf $45.95/sf 05/25/10

323 Park Knoll Durham, NC 128,000sf $43.61/sf 12/22/10

4400 Emperor Blvd.Durham, NC 182,165sf $41.03/sf 07/01/10

INDUSTRIAL LAND COMPSAddress Size Use Price Date

100 Laurensfield Ct. 8.924 Truck $2.31/sfGarner, NC acres+/1 Maintenance $100,600/acre

7/29/10

2800 Spring Forest 4.80 $3.94/sfRaleigh, NC acres+/- Mini-Storage $171,600/acre

7/28/10

860 E. Garner 4.95 Martin $2.78/sfGarner, NC acres+/- Marietta $121,100/acre

4/1/10

S. New Hope Rd 10.08 Public Service $4.78/sf& Global St, Raleigh, NC acres+/- Gas $206,900/acre

4/1/10

Northeast Food 8.00 Manufacturing $29,000/acre 6/1/10Clayton, NC acres

CONSTRUCTION COSTS INCREASE• Steel has increased 16% this year

• Concrete to increase $5/yard in April

• Fuel increase effects asphalt /rubber roof/ PVC Pipe / Transportation

• Grading industry is out of business. When the market comes back, a few grading contractors will control the prices charged.

• $55/sf to build a 60,000sf concrete building.

LEASE COMPSTYPE RATE

24’ – 30’ Clear $3.75 - $4.50/sf100% HVACESFR

Lower Ceilings $2.95 - $3.75/sfOlder

Outside Wake As low as and Durham Counties $1.75/sf

AFFORDABLE OPTIONSLOCATION TYPE RATE/PRICENorth Raleigh 148,000sf (30’ clear) $3.75/sf lease Inside the Beltline 56,000sf (rail served) $3.25/sf lease

RTP 170,000sf (20’ clear) $3.25/sf lease

Knightdale 120,000sf (21’ clear) $2.95/sf lease

Clayton 490,000sf (30’ clear) $3.25/sf lease

Clayton Industrial Land $29,000 to $65,000/AC

Creedmoor 150,000sf (100% HVAC) $1.75/sf lease

Butner 42,000sf (Manufacturing) $18.00/sf purchase

Butner Industrial Land $19,000/AC

TRIANGLE INDUSTRIAL OVERVIEW

LOOK BACK TODAY PREDICITIONS

Ed Brown, SIOR, CCIMNAI Carolantic Realty

March 16, 2011

INDUSTRIAL PREDICTIONS

2011 2012 2013Absorption Negative Positive Positive

Vacancy Up Down Down

Rates Stable Stable Up

Spec Construction None None Yes

Land Value Down Stable Up

Construction Costs Up Up Up

Job Growth Good Better Best

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