Industrial Real Estate Trends Presented to: Presented by: 2010 CCIM Commercial Real Estate Outlook Conference CB RICHARD ELLIS, INC. Michael Silver, SIOR First Vice President Industrial Brokerage Services

U.S. Distressed Properties 4th Quarter 2009 (In Billions of Dollars)

Airport/Doral55,972, $8.77-1,483,91175,000510,695 Central Dade39,428, $ ,88700 Hialeah16,992, $ ,844060,000 Kendall/Tamiami14,050, $ , ,450 Medley40,839, $ , ,879 Miami Lakes8,642, $ ,743 North Central Dade35,785, $ , ,815 North East Dade3,693, $ ,80600 South Dade5,498, $ ,976026,769 Total221,269, $7.20-5,590,99975,0001,988,351 Miami-Dade Industrial Market Statistics Avg Asking Dir Lse Rate (IG) Under Constructio n YTD Net Absorption Total Availability % Building SF Submarke t Total Vacancy % Constructio n Completion s 4 th Quarter 2009

Miami-Dade Industrial Market Statistics 4 th Quarter 2009 Total Vacancy -vs- Average Asking Lease Rate Vacancy Rate Asking Lease Rate 10.0 % $7.20

Miami-Dade Industrial Market Statistics 4 th Quarter 2009 Direct Asking Lease Rate (IG) Flex $11.57 Bulk $7.02

Miami-Dade Industrial Market Statistics Airport/Doral Asking Lease Rates vs. Effective Lease Rates

Miami-Dade Industrial Market Statistics 4 th Quarter 2009 Net Absorption YTD 2009 (5, 590) K

2009 Market Trends – Tenant/Occupier Tenant/Occupier Trends  Tenants are driving cheaper deals.  Tenants investigate market and then renew.  Tenants are requesting increase in rent versus funding out- of-pocket improvements.  Tenants are looking to utilize less space and increase efficiencies.  Tenants are looking to reduce all occupancy costs, not just rent.  Decision making is getting through division and real estate but then is not approved or stalled at corporate level.  Portfolio optimization will be high on companies’ lists of priorities.

2009 Market Trends – Tenant/Occupier Tenant/Occupier Trends Cont’d.  Outsourcing services are and will continue to be in high demand.  Reconfiguration of supply chain is driving new demand for space.  More Tenants choosing to keep requirements confidential due to internal impact on employment.  Tenants are looking to restructure leases.  Tenants are checking Landlord credit for stability.  Shorter term leases from both landlord and occupier.

2009 Market Trends – Landlord/Developer Landlord/Developer Trends  Most, if not all, major planned projects have been put on hold.  Developers are finding it difficult to raise capital.  Developers are forced to sell assets to raise capital at higher cap rates than purchased.  REITS are raising capital through secondary stock offerings.  Leveraged property owners are at a major disadvantage in this market.  Defaults are being caused by refinancing requirements.  Tighter credit restrictions by Landlords for requested Tenant improvements.

Landlord/Developer Trends Cont’d.  “I will renegotiate a lease for a struggling tenant before having a vacancy.”  Landlords attempting to hold asking rates, but offering aggressive proposals.  Landlords are very aggressive. “We will find a way to make the deal.”  Lease-up shelf times are in the month range.  Landlords are getting out to meet the “go to” brokers.  Shorter term leases from both landlord and occupier Market Trends – Landlord/Developer

2009 Market Trends – Industrial Market  Land in most markets is all but dead.  58 of 62 US industrial markets increased availability over previous quarter.  We have witnessed nine consecutive quarters of rising availability in the US. This trend will continue through  Flight to quality and safety is the order of the day.  Investors are shying away from secondary and tertiary markets.  Traffic in and out of the global shipping ports was down 20%- 45% in 2009, but starting to stabilize.  Big box retailers who accounted for large chunks of absorption are now giving back this space. Industrial Market

 Industrial markets have been able to turn off supply faster than other product types.  Rail will continue to see increased demand as transportation costs rise and roadway congestion increases.  Construction costs continue to decrease during this downturn.  Too late to sell, too early to buy Industrial Market Cont’d Market Trends – Industrial Market

Brokerage 2009 Market Trends – Brokerage  Qualify the deal more than ever  Know your clients/customers’ capital structure  Broker incentives are “in vogue”  Utilization of a national and global network is now full expected  Knowing what companies do well in a down cycle is important  Advisors who can paint a picture of the road ahead will be valued most  Leasing teams need to act like an owner  Brokers are being asked to sign confidentiality agreements to keep lease rates undisclosed

Brokerage Cont’d Market Trends – Brokerage  In Europe, having only occasionally used advisors, 3pl’s now outsourcing/partnering (e.g. DHL, TNT, CEVA) – Big opportunities  Old Saying: “If you continue to do what you have always done, you will only get what you have”.  New Saying: “If you continue to do what you have always done, you will now lose what you have”.

2010 US Industrial Market Forecast  Overall availability rates will continue to rise as companies right size their space needs.  Many US markets will fluctuate or “bounce along the bottom” during 2010 in transaction activity levels.  Manufacturing production will show modest increases in an effort to replenish very low inventory levels.  A view or belief of a “light at the end of the tunnel” will have Landlords reevaluate deep rental concessions for years 2013 and beyond.  3PL activity will continue to increase as companies look to better optimize their inventory and supply chain network.  As business confidence grows, some companies will look to extend length of lease term or renewal options to benefit from tenant advantageous market conditions.

2009 © CB Richard Ellis. We obtained the information above from sources we believe to be reliable. However, we have not verified its accuracy and make no guarantee, warranty or representation about it. It is submitted subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or estimates for example only, and they may not represent current or future performance of the property. You and your tax and legal advisors should conduct your own investigation of the property and transaction. m Michael Silver, SIOR First Vice President Industrial Brokerage Services CB RICHARD ELLIS, INC. 777 Brickell Ave, Suite 900 Miami, FL T F