1Q

2011

2Q

2011

VACANCY

NET ABSORPTION

CONSTRUCTION

RENTAL RATE

MARKET REPORTNASHVILLE

www.colliers.com/Nashville

Industrial Market Stabilizes

As the economy strengthens, the industrial market is starting to stabilize. The past year was a difficult one, with little growth in any area of the commercial real estate market. With the second quarter of 2011, we’re seeing some improvement. The length of time required to complete transactions continues to remain long as tenants maintain a cautious approach. Many of the transaction posted during this quarter originated in August of 2010. Despite this cautious approach, transactions are being completed and tenants are more receptive to investing in larger spaces.

Absorption posted negative 115,000 SF despite several 100,000+ SF leases being signed during the quarter, a dramatic change from last quarter’s positive absorption of 479,828 square feet. Vacancy rates remained stable since the first quarter at 12.3%, an increase from the second quarter of last year. The highest rates were recorded in the Southwest Corridor with an average of $7.86.

MARKET INDICATORS

2Q 2011 | INDUSTRIAL

Nashville Industrial MarketSummary of Statistics, Q2 2011

Vacancy Rate: 12.3%

Absorption: -111,324 SF

Under Construction: 589,000 SF

Asking Rents Per Square Feet: Overall Rental Rates: $5.44Warehouse - Distribution: $3.95Light Industrial: $6.99Heavy - Mfg: $0.00Bulk Warehouse: $4.10Flex/R&D: $4.81

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

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

Q3.10 1,950 158,329,421 19,201,016 12.1% 1.6% (1,231,090) (1,448,503) 186,809 $4.27

Q2.10 1,950 158,328,561 17,328,561 11.3% 1.6% (683,239) (217,387) 186,809 $4.31

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 1,054 49,142,084 5,529,285 11.3% 0.4% 137,937 269,157 $3.95

Light Industrial 560 58,154,049 2,480,244 4.3% 0.8% (70,745) 161,771 $6.99

Heavy - Mfg 6 779,289 0 0.0% 0.0% 0 0 $0.00

Bulk Warehouse 99 39,050,101 9,364,133 25.0% 3.5% (97,090) 455,578 $4.10

Flex/R&D 225 12,012,907 2,203,824 18.3% 1.4% (85,712) 135,974 $4.81

-

-

Updated 7-2011

The automotive supplier industry has begun further development in the area the relocations of Valeo, Carlex, and Tottser-Iroquois Industries. In addition to these companies, GM is planning on producing two midsize cars and adding over 1,000 jobs to the Williamson County area. Nissan has also decided to relocate their North American headquarters to Nashville. Both of these moves predict positive growth in the automotive industry for the Nashville MSA.

Though this quarter showed little improvement, experts feel positive about growth for the industrial market as the national and local economies strengthen.

Flex/R&D

Bulk Warehouse

Heavy - Mfg

Light Industrial

Warehouse - Distribution

2Q 2011 | Vacancy Space By Type

-400000

-350000

-300000

-250000

-200000

-150000

-100000

-50000

0

50000

100000

150000

Nort

h

Airp

ort S

outh

wes

t

Wes

t

Sout

heas

t

East

IBD

2Q 2011 | Net Absorption By Submarket

RECENT SALES TRANSACTIONSSALES ACTIVITY

PROPERTY BUYER/SELLER SALE PRICE SIZE SF SUBMARKET

7200 Centennial Blvd Carlex/Zeledyne $7,500,000 1,607,630 West

2225 Madison St Space for Lease/NCP 2007 Clarksville, LLC $2,600,000 303,899 North

Beckwith Farms Building 4A Jupiter Band/Panattoni $6,200,000 100,000 East

186 First St North TBA Investments/Noland Co $1,122,000 54,474 IBD

118 Wheeler Tottser-Iroquois Industries/KHS America $1,129,000 28,105 Southeast

RECENT LEASING TRANSACTIONSLEASING ACTIVITY

PROPERTY ADDRESS TENANT SIZE SF TYPE SUBMARKET

Midsouth Logistic IV HP 300,000 Renewal Southeast

Midsouth Logistic IV Sims Recycling Group 200,000 Renewal Southeast

211 Nesbitt Ln US Lumber 150,926 New North

611 Enon Springs Rd East Valeo 129,493 New Southeast

Interstate 24 Distribution Ctr #1 Xpedx 117,000 New Southeast

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.

P. 2 | COLLIERS INTERNATIONAL

MARKET REPORT | Q2 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

ST

NET ABSORPTION

YTD SF

AVG ASKING RATE

EAST 306 26,285,394 5,147,120 19.6% 20.1% 0.4% 142,893 (109,778) $5.09

Bulk Warehouses 29 12,852,289 4,293,167 33.4% 33.8% 0.0% 56,500 122,558 $3.07

Flex/R&D 42 1,846,006 232,460 12.6% 12.4% 0.9% (2,539) (43,569) $7.71

Light Industrial 88 5,305,384 82,000 1.5% 1.5% 0.0% 0 (62,000) $5.36

Warehouse - Distribution 147 6,281,715 539,493 8.6% 10.0% 1.3% 88,932 (126,767) $5.48

NORTH 451 39,891,696 3,294,849 8.3% 8.2% 1.5% (38,789) 124,207 $4.06

Bulk Warehouses 19 6,995,658 712,790 10.2% 10.2% 5.5% 0 (27,790) $3.10

Flex/R&D 40 1,580,142 311,939 19.7% 15.7% 0.0% (63,839) (10,965) $4.83

Heavy - Mfg 1 314,125 0 0.0% 0.0% 0.0% 0 0 $0.00

Light Industrial 140 17,076,001 441,524 2.6% 2.6% 1.3% 0 46,897 $3.43

Warehouse - Distribution 251 13,925,770 1,828,596 13.1% 13.3% 0.0% 25,050 116,065 $3.92

SOUTHEAST 421 50,873,515 8,177,911 16.1% 15.7% 2.2% (191,161) 168,659 $5.65

Bulk Warehouses 45 17,577,624 4,330,176 24.6% 23.8% 5.6% (153,590) 388,810 $3.67

Flex/R&D 79 4,292,998 1,153,269 26.9% 26.3% 1.0% (22,672) (85,553) $7.51

Heavy - Mfg 3 149,990 0 0.0% 0.0% 0.0% 0 0 $0.00

Light Industrial 102 17,190,296 950,727 5.5% 5.5% 0.1% 0 0 $3.79

Warehouse - Distribution 192 11,662,607 1,743,739 15.0% 14.8% 0.6% (14,899) (134,598) $4.90

SOUTHWEST 235 13,590,828 897,640 6.6% 6.7% 2.0% 18,076 21,355 $7.86

Bulk Warehouses 4 918,130 28,00 3.0% 3.0% 0.0% 0 (28,000) $0.00

Flex/R&D 42 3,360,804 365,310 10.9% 11.0% 0.2% 3,638 8,229 $9.81

Heavy - Mfg 1 100,000 0 0.0% 0.0% 0.0% 0 0 $0.00

Light Industrial 58 3,385,631 155,258 4.6% 4.6% 6.0% 0 0 $2.50

Warehouse - Distribution 130 5,826,263 349,072 6.0% 6.2% 1.0% 14,899 41,126 $5.63

WEST 125 10,583,035 776,363 7.3% 6.8% 0.0% (55,613) (144,803) $3.65

Bulk Warehouses 1 500,000 0 0.0% 0.0% 0.0% 0 0 $0.00

Light Industrial 53 7,480,503 704,935 9.4% 8.5% 0.0% (70,745) (159,935) $3.63

Warehouse - Distribution 71 2,602,532 71,428 2.7% 3.3% 0.0% 15,132 15,132 $3.67

IBD 406 17,913,962 1,283,603 7.2% 7.2% 0.6% 8,984 (170,964) $5.36

Bulk Warehouses 1 206,400 0 0.0% 0.0% 0.0% 0 0 $0.00

Flex/R&D 22 932,957 140,846 15.1% 15.1% 10.9% (300) (4,116) $5.09

Heavy - Mfg 1 215,174 0 0.0% 0.0% 0.0% 0 0 $0.00

Light Industrial 119 7,716,234 145,800 1.9% 1.9% 0.0% 0 13,267 $5.88

Warehouse - Distribution 263 8,843,197 996,957 11.3% 11.4% 0.0% 9,284 (180,115) $5.26

GRAND TOTAL 1,944 159,138,430 19,577,486 12.3% 12.2% 1.4% (115,610) (111,324) $5.44

MARKET REPORT | Q2 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

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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.colliers.com/Nashville

Accelerating success.

Jerry MieleDIR +1 615 850 2735

Affiliate Broker

Bill BuckleyDIR +1 615 850 2705

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Max SmithDIR +1 615 850 2722

Affiliate Broker

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Partner

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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

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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 | Q2 2011 | INDUSTRIAL | NASHVILLE