2014 Real Estate Forecasts – Industrial

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Industrial Market Areas

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Regional Economic Trends by Type Industrial Space – Cap Rates

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This market is doing well. Rates are dropping due to theconfidence in this market and these products relative toalternate investments. Lower rates mean higher values.

Louisville MSA Market Performance

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-3 0.00 %

-1 5.00 %

0.00 %

15. 00%

30. 00%

-$0. 90

-$0. 75

-$0. 60

-$0. 45

-$0. 30

-$0. 15

$0.00

$0.15

$0.30

$0.45

$0.60

$0.75

$0.90MSA Performa nce & Effe c tiv e Re nt

Performance

Change in Effective Rent

The bl ue is th e I ndus tr ial per for m ance in th e MS A and t he gr een is t he e ff ect ive r ent s f or t he M S A. An upw ar d t r end is an i ndicat io n the m ar ket i s exp andi ng negat ive i s a decl ini ng m ar ket. Above zer o dnf tur ni ng is indi cat ive of a f ail ing m ar ket a nd a n egat ive at t he bot tom is t he next gr ow th ph ase of th e m ar ket .

Overall this leading indicator says the industrial market locally is doing well and will do well in 2014. The rise in 2012 & 2013 exceeds the 2001 recession recovery in magnitude and in a shorter time frame.

Louisville Broker Opinion – Market Performance

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A local measure of interest is the level of traffic visiting a property and the success in sell or leasing to visitors reported by brokers, agents, and owners for flex and warehouse space. Perfect score is 10.

Pertinent Characteristics of Industrial Distribution Space

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$0.00$0.50$1.00$1.50$2.00$2.50$3.00$3.50$4.00$4.50$5.00

Ren

t $/S

F

Louisville MSA Distribution Space Rent

CLASS "A" Asking CLASS "B" Asking

-1,000

-500

0

500

1,000

1,500

2,000

2,500

Abs

orpt

ion

SF

X 1

000

Louisville MSA Distribution Absorption

Louisville Industrial Employment Trends

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2000 2002 2004 2006 2008 2010 2012 201450

60

70

80

90

100

110

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

Real Estate Square Feet VS. SF per Employee

SF of Industrial Space per Employee Total Industrial SF

Years

SF p

er E

mpl

oyee

Tota

l Ind

ustr

ial S

F

Louisville 2012 and 2013 Industrial Rent Performance

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2013

2012

$1.00-$1.74

$1.75-$2.49

$2.50-$3.24

$3.25-$3.99

$4.00-$4.74

$4.75-$5.50

0

5

10

15

20

25

1 7 9

24

15

6

DISTRIBUTION OF WAREHOUSE RENTS (OVERALL)

NUM

BER

OF

BUIL

DIN

GS

Year

Weighted Average Rent $/SF

2012 3.632013 4.05

Trended Regional and MSA Industrial Property Sales

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2009 Flex 15,650,000 1,085,333 33.98 5 1980 20 50%2009 Warehouse 84,060,974 3,923,483 33.87 21 1990 7.80% 21 30%2010 Flex 119,164,106 4,673,565 31.76 16 1993 9.30% 31 71%2010 Warehouse 175,503,707 7,961,305 32.36 29 1988 8.80% 42 55%2011 Flex 285,285,111 10,717,051 38.06 27 1994 8.10% 36 100%2011 Warehouse 412,649,252 19,404,058 29.37 482012 Flex 29,497,169 2,247,404 61.91 10 1988 8.10% 10 100%2012 Warehouse 223,052,299 8,782,068 27.54 26 1992 8.10% 45 95%2013 Flex R&D 73,218,969 699,996 $104.60 12 1,994 8 100%2013 Warehouse 26,934,091 5,150,357 $54.30 23 1992 6.82% 10 75%

2008 Flex 2,200,000 $82.82 1 1997 2 100%2008 Warehouse 61,500,000 2,090,000 $28.57 3 2007 8.00% 68%2009 Warehouse 9,000,000 942,000 $9.55 1 602010 Warehouse 10,529,137 577,949 $35.64 2 2000 8.20% 24 100%2012 Flex R&D 2,875,000 91,000 $31.59 1 1979 102012 Warehouse 48,150,000 1,835,500 $31.40 3 1990 23 81%2013 Flex R&D 8,000,000 97,546 $82.00 1 2000 10 88%2013 Warehouse 117,606,781 3,057,341 $38.47 9 2003 15 100%

CAP RATE

LAND AREA

IN ACRES OCCUPANCY

OCCUPANCY

Louisville MSA Large Industrial Transactions

YEAR SPACE TYPE PRICE IN $ SQ FT $/SQ FT TRANFERSYEAR BUILT

Industrial Transactions in GA, NC, SC, TN and KY Over $1,000K

YEAR SPACE TYPE PRICE IN $ SQ FEET AVG.

$/SQ FT TRANFERSAVG. YR.

BUILTAVG. CAP

RATE

LAND AREA

IN ACRES

Pertinent Characteristic of Industrial Distribution Vacant Land in Industrial or Business Parks

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Current Park

Developed Acreage

Available for Office/Retail

Asking price X1000

Undeveloped Acreage

Available for Future Park

Use

Developed Acreage

Available for Industrial

Asking price

X1000

Industrial Acres Sold

2013

Office/ Retail Acres Sold

2013

Eastpoint Business Park 20 $195 0 20 $195 0.00 0.0Highpoint Industrial Park 0 n/a 0 19 $55 35.00 0.0

Riverport International 40 $75 150 200 $75 0.00 0.0Commerce Crossing 23 $150 0 0 n/a 0.00 0.0

Settlers Point Business Park (Shep) 113 $175-450 117 21 $150-165 36.00 2.0Bruce Development $0 0 9 $80 0.00 0.0

Blankenbaker Station 200 150-400 267 200 $175-$225 30.00 0Mount Washington (City Owned) 0 n/a 60 27 ~ $70 0.00 0.0

Cedar Grove(Brooks Ky.) 7 $250-$450 N/A 72 150-165 37.00 0.0Kingbrook Commerce Park 0 n/a 40 65 65-85 20.00 0.0

Midland Industrail Park 0 $65 45 25 $55 10.00 4.0Shelby Business Park SOLDOUT n/a 0 0 n/a 10.00 n/a

Windhurst Industrial Park 25 $50 0 50 50-60 0.00 0.0Renaissance Park (RAA) 0 $150 120 0 150-160 15.00 0.0

River Ridge Commerce Center 11 $150-$320 5,700 395 ~ $45-$70 32.00 2.0Clark Maritime Center (Ports of Indiana) n/a n/a 0 350 Lease Only 0.00 0.0

Blankenbaker Crossing 45.1 675((or lease) 0 0 0.00 0.0 2012 Data. No responded for 2013 0 0

Keystone 0 n/a 0 9 $72.5-$95 0.00 0.0Grantline 3 $60-$65 8 5 $60-$65 0.00 0.0

Southern Indiana/Bridgeport 0 n/a 0 63 $55-$85 0.00 0.0Oldham County 0 n/a 900 40 $40 - $65 0.00 0.0

Sellersburg Industrial Park 0 n/a 0 63 $55-95 0.00 0.0Southpoint (Commerce Crossing) 0 N/A 0 25 $250 0.00 0.0

2013 Sub-Total 487 7,407 1,658 225 82012 Sub-Total 629 7918 1928 63 7

2013 Land Inventory in Park Environments in MSA