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Industrial Report
Y E A R - E N D 2 0 0 9
Table of Contents
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A
Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B
Terms & Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C
Market Highlights & Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CoStar Markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Employment & Tenant Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Employment & Unemployment Analysis
Inventory & Development Analysis
Select Top Deliveries
Select Top Under Construction Properties
Figures at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Figures at a Glance by Building Type & Market
Historical Figures at a Glance
Leasing Activity Analysis
Select Top Lease Transactions
Sales Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Sales Activity Analysis
Select Top Sales Transactions
Select Same Building Sales
Select Land Sales
Analysis of Individual CoStar Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Chisago County Market
East Market
Isanti County Market
Midway Market
Minneapolis Market
North Central Market
Northwest Market
Pierce County Market
Sherburne County Market
South Central Market
Southwest Market
St Croix County Market
St Paul Market
Stearns County Market
Wright County Market
Methodology
The CoStar Industrial Report calculates Industrial statistics using CoStar Group's base of existing,
under construction and under renovation Industrial buildings in each given metropolitan area. All
Industrial building types are included, including warehouse, flex / research & development, distribution,
manufacturing, industrial showroom, and service buildings, in both single-tenant and multi-tenant
buildings, including owner-occupied buildings. CoStar Group's national database includes approximately
69.1 billion square feet of coverage in 2.8 million properties. All rental rates reported in the CoStar
Industrial Report are calculated using the quoted rental rate for each property.
For information on subscribing to CoStar’s other products and services, please contact us at
1-877-7COSTAR, or visit our web site at www.costar.com
© Copyright 2010 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the
information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or
completeness of the information. The publication is provided ‘as is’ and CoStar expressly disclaims any guarantees, representations or
warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Multi-Tenant: Buildings that house more than one tenant at a Seller: The individual, group, company, or entity that sells a par-
given time. Usually, multi-tenant buildings were designed and ticular commercial real estate asset.
built to accommodate many different floor plans and designs for SF: Abbreviation for Square Feet.
different tenant needs. (See also: Tenancy).
Single-Tenant: Buildings that are occupied, or intended to be
Net Absorption: The net change in occupied space over a given occupied by a single tenant. (See also: Build-to-suit and Tenancy)
period of time. Unless otherwise noted Net Absorption includes
direct and sublease space. Sublease Space: Space that has been leased by a tenant and is
being offered for lease back to the market by the tenant with
Net Rental Rate: A rental rate that excludes certain expenses that the lease obligation. Sublease space is sometimes referred to as
a tenant could incur in occupying office space. Such expenses sublet space.
are expected to be paid directly by the tenant and may include
janitorial costs, electricity, utilities, taxes, insurance and other Submarkets: Specific geographic boundaries that serve to delin-
related costs. eate a core group of buildings that are competitive with each
other and constitute a generally accepted primary competitive
New Space: Sometimes called first generation space, refers to set, or peer group. Submarkets are building type specific (office,
space that has never been occupied and/or leased by a tenant. industrial, retail, etc.), with distinct boundaries dependent on
Occupied Space: Space that is physically occupied by a tenant. different factors relevant to each building type. Submarkets are
It does not include leased space that is not currently occupied non-overlapping, contiguous geographic designations having a
by a tenant. cumulative sum that matches the boundaries of the Market they
are located within (See also: Market).
Office Building: A type of commercial building used exclusively
or primarily for office use (business), as opposed to manufactur- Suburban: The Suburban and Central Business District (CBD)
ing, warehousing, or other uses. Office buildings may sometimes designations refer to a particular geographic area within a metro-
have other associated uses within part of the building, i.e., retail politan statistical area (MSA). Suburban is defined as including all
sales, financial, or restaurant, usually on the ground floor. office inventory not located in the CBD. (See also: CBD)
Owner: The company, entity, or individual that holds title on a Tenancy: A term used to indicate whether or not a building is
given building or property. occupied by multiple tenants (See also: Multi-tenant) or a single
tenant. (See also: Single-tenant)
Planned/Proposed: The status of a building that has been
announced for future development but not yet started Tenant Rep: Tenant Rep stands for Tenant Representative. In a
construction. typical lease transaction between an owner/landlord and tenant,
the broker that represents the interests of the tenant is referred to
Preleased Space: The amount of space in a building that has been
as a Tenant Rep.
leased prior to its construction completion date, or certificate of
occupancy date. Time On Market: A measure of how long a currently available
space has been marketed for lease, regardless of whether it is
Price/SF: Calculated by dividing the price of a building (either
vacant or occupied.
sales price or asking sales price) by the Rentable Building Area
(RBA). Under Construction: The status of a building that is in the process
of being developed, assembled, built or constructed. A building is
Property Manager: The company and/or person responsible for
considered to be under construction after it has begun construc-
the day-to-day operations of a building, such as cleaning, trash
tion and until it receives a certificate of occupancy.
removal, etc. The property manager also makes sure that the vari-
ous systems within the building, such as the elevators, HVAC, and Vacancy Rate: A measurement expressed as a percentage of the
electrical systems, are functioning properly. total amount of physically vacant space divided by the total
amount of existing inventory. Under construction space generally
Quoted Rental Rate: The asking rate per square foot for a par-
is not included in vacancy calculations.
ticular building or unit of space by a broker or property owner.
Quoted rental rates may differ from the actual rates paid by Vacant Space: Space that is not currently occupied by a tenant,
tenants following the negotiation of all terms and conditions in regardless of any lease obligation that may be on the space.
a specific lease. Vacant space could be space that is either available or not avail-
RBA: Abbreviation for Rentable Building Area. (See also: able. For example, sublease space that is currently being paid for
by a tenant but not occupied by that tenant, would be considered
Rentable Building Area)
vacant space. Likewise, space that has been leased but not yet
Region: Core areas containing a large population nucleus, that occupied because of finish work being done, would also be con-
together with adjacent communities have a high degree of eco- sidered vacant space.
nomic and social integration. Regions are further divided into
Weighted Average Rental Rate: Rental rates that are calculated by
market areas, called Markets. (See also: Markets)
factoring in, or weighting, the square footage associated with each
Relet Space: Sometimes called second generation or direct space, particular rental rate. This has the effect of causing rental rates
refers to existing space that has previously been occupied by on larger spaces to affect the average more than that of smaller
another tenant. spaces. The weighted average rental rate is calculated by taking
Rentable Building Area: (RBA) The total square footage of a the ratio of the square footage associated with the rental rate on
building that can be occupied by, or assigned to a tenant for the each individual available space to the square footage associated
purpose of determining a tenant’s rental obligation. Generally with rental rates on all available spaces, multiplying the rental rate
RBA includes a percentage of common areas including all hall- by that ratio, and then adding together all the resulting numbers.
ways, main lobbies, bathrooms, and telephone closets. Unless specifically specified otherwise, rental rate averages include
both Direct and Sublet available spaces.
Rental Rates: The annual costs of occupancy for a particular
space quoted on a per square foot basis. Year Built: The year in which a building completed construction
and was issued a certificate of occupancy.
Sales Price: The total dollar amount paid for a particular property
at a particular point in time. YTD: Abbreviation for Year-to-Date. Describes statistics that are
cumulative from the beginning of a calendar year through what-
Sales Volume: The sum of sales prices for a given group of build- ever time period is being studied.
ings in a given time period.
T
he Minneapolis Industrial market ended the fourth negative (405,877) square feet in the fourth quarter 2009 com-
quarter 2009 with a vacancy rate of 7.3%. The vacancy pared to negative (1,317) square feet in the third quarter 2009,
rate was up over the previous quarter, with net absorp- negative (322,510) in the second quarter 2009, and negative
tion totaling negative (292,432) square feet in the fourth quarter. (175,649) in the first quarter 2009.
Vacant sublease space decreased in the quarter, ending the quarter
Vacancy
at 599,105 square feet. Rental rates ended the fourth quarter
The Industrial vacancy rate in the Minneapolis market area
at $6.09, a decrease over the previous quarter. A total of three
increased to 7.3% at the end of the fourth quarter 2009. The
buildings delivered to the market in the quarter totaling 176,739
vacancy rate was 7.2% at the end of the third quarter 2009, 7.2%
square feet, with 28,042 square feet still under construction at the
at the end of the second quarter 2009, and 7.0% at the end of the
end of the quarter.
first quarter 2009.
Absorption Flex projects reported a vacancy rate of 10.5% at the end
Net absorption for the overall Minneapolis Industrial of the fourth quarter 2009, 10.5% at the end of the third quarter
market was negative (292,432) square feet in the fourth quarter 2009, 10.4% at the end of the second quarter 2009, and 10.3%
2009. That compares to negative (23,407) square feet in the third at the end of the first quarter 2009.
quarter 2009, negative (435,313) square feet in the second quar- Warehouse projects reported a vacancy rate of 6.4% at the
ter 2009, and negative (251,501) square feet in the first quarter end of the fourth quarter 2009, 6.2% at the end of third quarter
2009. 2009, 6.2% at the end of the second quarter 2009, and 6.1% at
Tenants moving into large blocks of space in 2009 include: the end of the first quarter 2009.
Jacobs Trading Company moving into 330,000 square feet at
Largest Lease Signings
Continental Decatur, BP Wind Energy North America moving
The largest lease signings occurring in 2009 included: the
into 244,666 square feet at River Road Industrial Center, and
330,000-square-foot lease signed by Jacobs Trading Company
Cokem International, Ltd. moving into 157,000 square feet at
at Continental Decatur in the Southwest market; the 300,000-
3880 4th Ave E.
square-foot deal signed by Silgan Containers at 1080 Park Pl in
The Flex building market recorded net absorption of posi-
the Southwest market; and the 244,666-square-foot lease signed
tive 113,445 square feet in the fourth quarter 2009, compared to
by BP Wind Energy North America at River Road Industrial
negative (22,090) square feet in the third quarter 2009, negative
Center in the North Central market.
(112,803) in the second quarter 2009, and negative (75,852) in
the first quarter 2009. Sublease Vacancy
The Warehouse building market recorded net absorption of The amount of vacant sublease space in the Minneapolis
12%
10%
Vacancy Rate
8%
6%
4%
2%
0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
market decreased to 599,105 square feet by the end of the fourth ing 160,038 square feet completed in the second quarter 2009,
quarter 2009, from 701,160 square feet at the end of the third and 381,773 square feet in four buildings completed in the first
quarter 2009. There was 634,476 square feet vacant at the end quarter 2009.
of the second quarter 2009 and 659,235 square feet at the end of There was 28,042 square feet of Industrial space under con-
the first quarter 2009. struction at the end of the fourth quarter 2009.
Minneapolis’s Flex projects reported vacant sublease space Some of the notable 2009 deliveries include: 9150 217th St
of 132,050 square feet at the end of fourth quarter 2009, down W, a 282,100-square-foot facility that delivered in first quarter
from the 262,973 square feet reported at the end of the third 2009 and is now 0% occupied, and AMB Rogers Distribution
quarter 2009. There were 346,165 square feet of sublease space Center, a 147,160-square-foot building that delivered in second
vacant at the end of the second quarter 2009, and 352,329 square quarter 2009 and is now 42% occupied.
feet at the end of the first quarter 2009. The largest projects underway at the end of fourth quarter
Warehouse projects reported increased vacant sublease space 2009 were 4001 Valley Industrial Blvd S, a 19,800-square-foot
from the third quarter 2009 to the fourth quarter 2009. Sublease building with 0% of its space pre-leased, and 576 Front Ave, an
vacancy went from 438,187 square feet to 467,055 square feet 8,242-square-foot facility that is 100% pre-leased.
during that time. There was 288,311 square feet at the end of the
Inventory
second quarter 2009, and 306,906 square feet at the end of the
Total Industrial inventory in the Minneapolis market area
first quarter 2009.
006-2009 amounted to 341,649,959 square feet in 8,413 buildings as of
Rental Rates the end of the fourth quarter 2009. The Flex sector consisted of
Warehouse Total Market
The average quoted asking rental rate for available Industrial 74,906,692 square feet in 1,995 projects. The Warehouse sector
space was $6.09 per square foot per year at the end of the fourth consisted of 266,743,267 square feet in 6,418 buildings. Within
quarter 2009 in the Minneapolis market area. This represented the Industrial market there were 427 owner-occupied buildings
a 2.2% decrease in quoted rental rates from the end of the third accounting for 37,681,952 square feet of Industrial space.
quarter 2009, when rents were reported at $6.23 per square
Sales Activity
foot.
Tallying industrial building sales of 15,000 square feet or
The average quoted rate within the Flex sector was $8.02
larger, Minneapolis industrial sales figures fell during the third
per square foot at the end of the fourth quarter 2009, while
quarter 2009 in terms of dollar volume compared to the second
Warehouse rates stood at $5.66. At the end of the third quarter
quarter of 2009.
2009, Flex rates were $8.20 per square foot, and Warehouse rates
In the third quarter, 15 industrial transactions closed with a
were $5.75.
total volume of $38,104,310. The 15 buildings totaled 745,677
Deliveries and Construction square feet and the average price per square foot equated to
During the fourth quarter 2009, three buildings totaling $51.10 per square foot. That compares to 21 transactions totaling
2007 4q 176,739
2008 1q 2008square
2q feet
2008 3q were
2008 4qcompleted
2009 1q in 2q
2009 the 2009
Minneapolis
3q 2009 4q market $67,626,500 in the second quarter. The total square footage was
area. This compares to two buildings totaling 38,531 square 1,480,639 for an average price per square foot of $45.67.
feet completed in the third quarter 2009, four buildings total- Total year-to-date industrial building sales activity in 2009 is
down compared to the previous year. In the first nine months of
U.S. Vacancy Comparison 2009, the market saw 48 industrial sales transactions with a total
Past 10 Quarters volume of $139,709,778. The price per square foot has averaged
Minneapolis United States $47.81 this year. In the first nine months of 2008, the market
12.0% posted 107 transactions with a total volume of $632,245,878.
10.0%
The price per square foot averaged $80.66.
Cap rates have been higher in 2009, averaging 9.28%, com-
8.0% pared to the first nine months of last year when they averaged
Vacancy Rate
8.31%.
6.0%
One of the largest transactions that has occurred within the
4.0% last four quarters in the Minneapolis market is the sale of 6200
Glenn Carlson Dr in Saint Cloud. This 338,000-square-foot
2.0% industrial building sold for $17,100,000, or $50.59 per square
0.0%
foot. The property sold on 10/15/2009.
2007 2007 2008 2008 2008 2008 2009 2009 2009 2009
3q 4q 1q 2q 3q 4q 1q 2q 3q 4q
Reports compiled by: Jennifer Quast CoStar Research Manager.
Source: CoStar Property•
CoStar Markets
In analyzing metropolitan areas in the U.S., CoStar has developed geographic designations to help group properties together, called
Regions, Markets and Submarkets. Regions are the equivalent of metropolitan areas, or areas containing a large population nucleus,
that together with adjacent communities have a high degree of economic and social integration. Regions are then divided into
Markets, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting
and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group
of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group.
Markets
Chisago County Ind
East Ind
Isanti County Ind
Midway Ind
Minneapolis Ind
North Central Ind
Northwest Ind
Pierce County Ind
Sherburne County Ind
South Central Ind
Southwest Ind
St Croix County Ind
St Paul Ind
Stearns County Ind
Wright County Ind
Percent Growth
2% 0.0%
Financial Activities
5%
Professional & Business -1.0%
8% Services
Education & Health -2.0%
Services
10% Leisure & Hospitality -3.0%
Other Services
-4.0%
15% Government
-5.0%
16%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Department of Labor, Bureau of Labor Statistics Source: Department of Labor, Bureau of Labor Statistics
10.0%
Percent Unemployment
8.0%
6.0%
4.0%
2.0%
0.0%
1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009
1q 3q 1q 3q 1q 3q 1q 3q 1q 3q 1q 3q 1q 3q 1q 3q 1q 3q 1q 3q 1q 3q
6.0 5.5
5.0 4.4
4.1
4.0 3.6
3.0
2.7 2.7
3.0
2.2 2.0 2.1 2.0
1.8 1.7 1.8
2.0 1.6
0.8
1.0
0.0
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: CoStar Property® * Future deliveries based on current under construction buildings.
2.0 20
T
Thousands of SF
Millions of SF
1.5 15
1.0 10
0.5 5
0.0 0
2005 2006 2007 2008 2009 2010 1q 2010 2q
1.0
0.8
0.8 0.8
0.8
Millions of SF
0.7
0.6 0.6
0.6
0.5 0.5 0.5
0.5 0.5 0.5
0.4 0.4
0.4 0.3 0.3
0.3 0.2 0.3
0.2
0.2
0.2 0.2
0.2 0.1 0.1
0.1 0.1
0.0
0.0 0.0 0.0
0.0
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project
Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant
3% 0%
33%
22%
78%
67%
97% 100%
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$8.00
$7.00
$6.00
Dollars/SF/Year
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
2% 5%
14%
69%
31%
86%
98% 95%
$6.20
1.0
$6.00
Dollars/SF/Year
$5.80 0.8
Millions
$5.60
0.6
$5.40
$5.20 0.4
$5.00 0.2
0.2
0.1
$4.80 0.0 0.0 0.0
2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 0.0
3q 4q 1q 2q 3q 4q 1q 2q 3q 4q 2010 1q 2010 2q 2010 3q 2010 4q 2011 1q 2011 2q
Source: CoStar Property® Source: CoStar Property® * Includes Under Construction Space
Select Top Industrial Leases Based on Leased Square Footage For Deals Signed in 2009
Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company
1 Continental Decatur Southwest Ind 330,000 1st Jacobs Trading Company Continental Property Group, Inc. Continental Property Group, Inc.
2 1080 Park Pl* Southwest Ind 300,000 2nd Silgan Containers Direct Deal NorthMarq
3 River Road Industrial Center North Central Ind 244,666 3rd BP Wind Energy North America Direct Deal Colliers Turley Martin Tucker
4 3880 4th Ave E Southwest Ind 157,000 2nd Cokem International, Ltd. NAI Welsh NAI Welsh
5 7401 N Boone Ave Northwest Ind 155,026 2nd AM Retail Group, Inc Direct Deal Direct Deal
6 2300 Pilot Knob Rd South Central Ind 124,783 4th MPC N/A NAI Welsh
7 MSP Midway Industrial Park #9* Midway Ind 123,464 2nd Northpoint Capital Partners, LLC Direct Deal NAI Welsh
8 Crosstown North Business Center - Bldg XII Northwest Ind 120,048 2nd Graybar Electric Co. CB Richard Ellis Colliers Turley Martin Tucker
9 Continental Distribution Center Southwest Ind 106,371 4th National Distribution Center N/A NAI Welsh
10 9210 Wyoming Ave N Northwest Ind 86,941 2nd Target Keewaydin Real Estate Advisors Duke Realty Corporation
11 IGH Dist Center South Central Ind 74,086 4th Land O’Lakes N/A NorthMarq
12 Plymouth Corporate Center Northwest Ind 65,000 3rd Comm-Works AREA CB Richard Ellis
13 AMB Rogers Distribution Center Northwest Ind 61,100 2nd Blu Dot NAI Welsh Colliers Turley Martin Tucker
14 5130 Industrial St Southwest Ind 56,620 2nd N/A N/A Wayzata Properties
15 4658 Heatherwood Rd Stearns County Ind 54,000 4th Quest Telecommunications N/A RQ Investments
16 8299 NE Central Ave* North Central Ind 53,000 3rd Medtronic, Inc. N/A N/A
17 12755 Highway 55 Northwest Ind 48,700 4th IQor, Inc CB Richard Ellis Walsh Partners, Inc.
18 AMB Aurora Industrial Warehouse North Central Ind 47,715 1st N/A N/A CB Richard Ellis
19 9449 Science Center Dr* Northwest Ind 46,726 3rd Multiband Corporation N/A N/A
20 1809 E Hennepin Ave Midway Ind 45,650 4th N/A N/A Paramount Real Estate Corporation
21 Eagandale Crossing South Central Ind 42,303 2nd Buffets, Inc. CB Richard Ellis Paramount Real Estate Corporation
22 940 E Hennepin Ave Midway Ind 41,000 2nd Arrowhead Contracting CB Richard Ellis Hillcrest Development LLLP
23 Boulder Lakes Office III South Central Ind 37,000 3rd AllianceOne, Inc. NorthMarq Transwestern
24 Rice Creek Business Center I North Central Ind 34,461 3rd N/A N/A Interstate Partners
25 Parkers Lake Pointe East Northwest Ind 32,760 3rd N/A N/A N/A
26 MSP Midway Industrial Park #8 Midway Ind 32,000 2nd Ryder Logistics N/A NAI Welsh
27 6533 Flying Cloud Dr* Southwest Ind 31,940 2nd Alternative Business Furniture, Inc. N/A NAI Welsh
28 Penn Avenue Business Center Southwest Ind 29,774 4th N/A N/A Standard Holdings
29 11300 K-Tel Dr Southwest Ind 29,540 2nd N/A N/A The C. Chase Company
30 Silver Bell Commons* South Central Ind 28,055 2nd Gleason’s Gymnastic School Direct Deal Direct Deal
31 Sun Lite III Northwest Ind 28,000 1st Roberts Hamilton Co. N/A NAI Welsh
32 5350 Highway 61 East Ind 28,000 2nd N/A Steve Harrington Steve Harrington
33 654 Industrial Blvd Southwest Ind 27,564 2nd Premier Gymnastics N/A Copperwood Investments LLC
34 New Brighton Commerce Center North Central Ind 26,763 3rd Comtrol UGL Equis Transwestern
35 Wedgwood Commerce Ctr 3 Northwest Ind 26,073 2nd Cartika Medical Inc NorthMarq Grubb & Ellis/Northco Real Estate S
36 Lexington Preserve Business Park - Phase II North Central Ind 24,537 2nd Karl Dungs N/A NAI Welsh
37 3750 N Annapolis Ln Northwest Ind 23,355 2nd Atritech Jones Lang LaSalle NorthMarq
38 CLT Floorcoverings Building South Central Ind 23,300 2nd N/A N/A Langer Real Estate Services
39 Diamond Lake Industrial Center I Northwest Ind 23,159 3rd Cabela’s Marine Source N/A Colliers Turley Martin Tucker
40 Huntington Building Southwest Ind 22,000 3rd N/A N/A NAI Welsh
The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter
$300
10.0%
Cap Rate Percentage
$250
8.0%
Dollars/SF
$200
6.0%
$150
4.0%
$100
2.0% $50
0.0% $0
2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q
$400 $180
< 25,000 SF 64 861,868 $ 69,370,443 $ 80.49 8.22%
Millions of Sales Volume Dollars
$160
$350
$140
$300
$120
Price/SF
$50 $20
$0 $0
2005 2005 2006 2006 2007 2007 2008 2008 2009 >250K SF 2 648,200 $ 24,940,000 $ 38.48 8.70%
2q 4q 2q 4q 2q 4q 2q 4q 2q
$140
8.0%
Dollars per SF
$120
$100 6.0%
$80
4.0%
$60
$40
2.0%
$20
$0 0.0%
2005 2005 2006 2006 2007 2007 2008 2008 2009 2005 2005 2006 2006 2007 2007 2008 2008 2009
2q 4q 2q 4q 2q 4q 2q 4q 2q 2q 4q 2q 4q 2q 4q 2q 4q 2q
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Select Land Sales Based on Industrial Zoned Land Sales Occurring From Oct. 2008 - Dec. 2009
Rich Valley Blvd, Inver Grove Heights 9349 W Broadway Ave, Brooklyn Park 2101-2201 W 94th St, Bloomington
Sale Price: $3,345,093 Sale Price: $2,505,608 Sale Price: $1,830,250
Acres: 29.18 Acres: 1.22 Acres: 4.96
Price/SF: $2.63 Price/SF: $47.15 Price/SF: $8.47
Closing Date: 12/18/2008 Closing Date: 12/30/2008 Closing Date: 01/15/2009
Zoning: Commercial Zoning: Unknown Zoning: I-2
Intended Use: Industrial Intended Use: Industrial Intended Use: Industrial
Buyer: Rich Valley Llc Buyer: Northwest EMC, Inc. Buyer: Forklifts Of Minnesota Inc
Seller: Pab Ents Of Minnesota Inc Seller: Ryan Companies US, Inc. Seller: 2145, LLP
0.200 10.0%
0.100 8.0%
Percent Vacant
Millions SF
0.000 6.0%
(0.100) 4.0%
(0.200) 2.0%
(0.300) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.18 $4.50
0.16 $4.40
0.14
Dollars/SF/Year
$4.30
Millions SF
0.12
$4.20
0.10
0.08 $4.10
0.06
$4.00
0.04
$3.90
0.02
0.00 $3.80
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
6.0%
0.150
5.0%
0.100
Percent Vacant
Millions SF
4.0%
0.050
3.0%
0.000
2.0%
(0.050)
1.0%
(0.100) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
1.10 $8.20
$8.00
Dollars/SF/Year
1.05 $7.80
Millions SF
$7.60
1.00 $7.40
$7.20
0.95
$7.00
$6.80
0.90
$6.60
0.85 $6.40
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
4.5%
0.060
4.0%
0.040 3.5%
Percent Vacant
Millions SF
3.0%
0.020
2.5%
0.000
2.0%
(0.020) 1.5%
1.0%
(0.040)
0.5%
(0.060) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.06
$5.20
Millions SF
0.05
$5.10
0.04 $5.00
0.03 $4.90
0.02 $4.80
0.01 $4.70
0.00 $4.60
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.200 12.0%
0.100
10.0%
Percent Vacant
0.000
Millions SF
8.0%
(0.100)
6.0%
(0.200)
4.0%
(0.300)
(0.400) 2.0%
(0.500) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
3.00 $6.20
2.50 $6.00
Dollars/SF/Year
Millions SF
2.00
$5.80
1.50
$5.60
1.00
$5.40
0.50
0.00 $5.20
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.200 8.0%
0.150
7.0%
0.100
6.0%
Percent Vacant
0.050
Millions SF
0.000 5.0%
(0.050) 4.0%
(0.100)
3.0%
(0.150)
2.0%
(0.200)
(0.250) 1.0%
(0.300) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
$5.50
2.00
$5.40
Dollars/SF/Year
Millions SF
1.50 $5.30
$5.20
1.00
$5.10
0.50
$5.00
0.00 $4.90
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
1.000 8.0%
7.0%
0.800
6.0%
Percent Vacant
0.600
Millions SF
5.0%
0.400
4.0%
0.200
3.0%
0.000
2.0%
(0.200) 1.0%
(0.400) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
3.50 $6.40
3.00 $6.20
Dollars/SF/Year
Millions SF
2.50
$6.00
2.00
$5.80
1.50
$5.60
1.00
$5.40
0.50
0.00 $5.20
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
9.0%
0.800
8.0%
0.600 7.0%
Percent Vacant
Millions SF
6.0%
0.400
5.0%
0.200
4.0%
0.000 3.0%
2.0%
(0.200)
1.0%
(0.400) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
4.00 $7.10
3.50
$7.00
Dollars/SF/Year
3.00
Millions SF
$6.90
2.50
2.00 $6.80
1.50
$6.70
1.00
$6.60
0.50
0.00 $6.50
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.010
20.0%
0.005
Percent Vacant
Millions SF
15.0%
0.000
(0.005)
10.0%
(0.010)
5.0%
(0.015)
(0.020) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.02 $2.50
Millions SF
$2.00
0.02
$1.50
0.01
$1.00
0.01
$0.50
0.00 $0.00
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
5.0%
0.050
4.0%
Percent Vacant
Millions SF
0.000
3.0%
(0.050)
2.0%
(0.100)
1.0%
(0.150) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
$5.90
Millions SF
0.25
$5.80
0.20
0.15 $5.70
0.10 $5.60
0.05 $5.50
0.00 $5.40
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.400
10.0%
0.300
8.0%
Percent Vacant
0.200
Millions SF
0.100 6.0%
0.000
4.0%
(0.100)
2.0%
(0.200)
(0.300) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
4.00 $6.20
3.50 $6.15
Dollars/SF/Year
Millions SF
3.00 $6.10
2.50
$6.05
2.00
$6.00
1.50
$5.95
1.00
$5.90
0.50
0.00 $5.85
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.800 12.0%
0.600 10.0%
Percent Vacant
Millions SF
0.400 8.0%
0.200 6.0%
0.000 4.0%
(0.200) 2.0%
(0.400) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
6.00 $6.20
5.00
Dollars/SF/Year
$6.15
Millions SF
4.00
3.00 $6.10
2.00
$6.05
1.00
0.00 $6.00
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
6.0%
0.150
5.0%
0.100
Percent Vacant
Millions SF
4.0%
0.050
3.0%
0.000
2.0%
(0.050)
1.0%
(0.100) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.35 $6.00
0.30 $5.00
Dollars/SF/Year
Millions SF
0.25
$4.00
0.20
$3.00
0.15
$2.00
0.10
$1.00
0.05
0.00 $0.00
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.150 8.0%
0.100 7.0%
0.050 6.0%
Percent Vacant
Millions SF
0.000 5.0%
(0.050) 4.0%
(0.100) 3.0%
(0.150) 2.0%
(0.200) 1.0%
(0.250) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.90 $6.00
0.80
$5.00
0.70
Dollars/SF/Year
Millions SF
0.60 $4.00
0.50
$3.00
0.40
0.30 $2.00
0.20
$1.00
0.10
0.00 $0.00
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
16.0%
0.400
14.0%
0.300
12.0%
Percent Vacant
Millions SF
0.200 10.0%
0.100 8.0%
6.0%
0.000
4.0%
(0.100)
2.0%
(0.200) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.45 $5.60
0.40
$5.40
0.35
Dollars/SF/Year
Millions SF
0.30 $5.20
0.25
$5.00
0.20
0.15 $4.80
0.10
$4.60
0.05
0.00 $4.40
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.150
10.0%
0.100
8.0%
Percent Vacant
0.050
Millions SF
0.000 6.0%
(0.050)
4.0%
(0.100)
2.0%
(0.150)
(0.200) 0.0%
2006 1q 2006 2q 2006 3q 2006 4q 2007 1q 2007 2q 2007 3q 2007 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q
0.40 $6.80
Millions SF
$6.60
0.30
$6.40
0.20
$6.20
0.10
$6.00
0.00 $5.80
2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2008 1q 2008 2q 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q