2015 Commercial Market Forecast

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September 30, 2015

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Keep Up Digitally Event Hashtag

#CMF15

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Thank You to Our Planning Committee Blair Belk, Belk | LucyThomas Boulware, NAI AvantBenjie Lanier, Wells Fargo SBAThomas Mathewes, Roadstead Real EstateDoug Roland, NAI AvantGerry Schauer, Avison YoungBryan Stange, ECS CarolinasVitre Stephens, Avison YoungClayton Taylor, Taylor ConsultingRyan Welch, Lee & Associates-Charleston

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Tri-City Bronze Sponsors

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Tri-City Silver Sponsors

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Tri-City Gold Sponsor

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Charleston Tables ADC EngineersAllianceAvison YoungBeach Co.BNC BankCaldwellCarolina OneCBRECC&TCHS IndustrialCollege of CharlestonCresCom BankDurlachECS CarolinasGoff D Antonio & AssociatesGrayson Thomas, LLCHolder PropertiesIntegra Realty ResourcesLee Assoc.NAI AvantSCBTSouth StateTD BankThe Shopping Center Group

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Stage Sponsor

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Charleston Bronze Sponsors

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Charleston Silver Sponsors

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Charleston Gold Sponsor

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Jim HillVice President, Commercial and Industrial Development & Land SalesWestRock Community Development and Land Management Division

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September 30, 2015

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RETAIL REPORT

Retail Analysis and Outlook

2015

Presented by: Jeff Yurfest, CCIM

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How does this look? Please put the footer on this one.15

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I will work to get the original file16

Total Retail By Submarket

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Please fix

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Charleston Retail Vacancy Rate

Can you add the Vacancy rate on top of the Graph?18

Southeast Retail Vacancy Rate

Greenville12.3%

Columbia8.5%

Charleston5.1%

Raleigh6.3%Charlotte 8.7%

Greenville12.3%

Columbia8.5%

Charleston5.1%

Raleigh6.3%Charlotte 8.7%

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Retail Vacancy by Submarket

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This is perfect20

Asking Rents for Charleston Retail

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Can you center the graphs over the years and make the graph a bit more 3d?21

Rental Rate by Submarket

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Please put he 2015 rental rate on top of the orange graph.

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King Street Rental Rates

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$55/FT$75/FT$45/FT

Good luck!23

Peninsula Growth Effecting Retail

Local and National Boutiques

Good luck!24

Sportsman Wars

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New and Expanding Grocers

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Retailers on the rise

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Retailers on the rise

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Carolina Park

www.CharlestonCommercialMarketForecast.com300100 70

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West Edge

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290,000 Square Feet

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Ingleside Plantation

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750K 1 Million Square Feet

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Nexton Square

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140,000 Square Feet

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Cainhoy Plantation

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300,000 Square Feet

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Courier Square

www.CharlestonCommercialMarketForecast.com19,000 Square Feet

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Key Takeaways

Declining vacancies and increasing development costs create historically high rental rates.Strong retailer interest supports new construction.National expansion continues into Charleston. Tourism remains beneficial for downtown retailers.Many large mixed use developments are on the horizon.All interior doors must match!

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Jeffrey Yurfest, CCIM

Jeff.Yurfest@tscg.com843-723-3054

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OFFICE REPORT

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Jeremy N. WillitsPrincipal, Office ServicesAvison Young

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North Morrison No-Mo District

Technology Jobs

Upper Peninsula Zoning District

Increasing Land Values

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Summerville/I-26 Corridor

Nexton

Direct/Indirect jobs

Service jobs followManufacturing

Less than 250,000 square feet class A

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What the Future Holds Significant development inside I-526

Rental Rates Increase

Values increase

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Jeremy N. WillitsPrincipal, Office ServicesAvison Youngjeremy.willits@avisonyoung.com843-270-9205

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INDUSTRIAL REPORT

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CTAR-CID COMMERCIAL & INDUSTRIAL MARKET FORECAST

Derek J. Mathis, Director of Industrial Development, WestRock

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MARKET DRIVERS

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NATIONAL/REGIONAL TRENDS National:21 quarters of positive net absorption6.7% vacancyRental rate growth is up 3.5% YOY. Tighter markets in the 5% rangeDemand outpacing new product delivery in most major markets Cap rates compressedCargo shiftProjected occupancy gains of 380mm SF in warehouse/distribution space from 2014-2017Regional:Mirrors national trends relative to absorption, rent growth and vacancy ratesSignificant speculative and BTSFL development underway in larger regional metros such as ATL, CLT, GSP and SAV

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LOCAL MARKET SNAPSHOT

Source: Colliers

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LOCAL TRENDSTYPE OF ACTIVITY?FDI driving SC economyBalanced mix of manufacturing and distributionWHERE?Prospects prefer project ready locationsInfill traditionally preferred location but that is changing Jedburg sub-market activity has increased significantlyWHY?Favorable business climateRight to WorkInfrastructureClusteringReshoring trendIts Charleston

Relative to prior period

Market Indicators+VacancyNet absorptionConstructionRental Rate++

Note: Construction is the change in Under Construction*ProjectedQ2 2015Q3 2015*+Source: Colliers International 54% Manufacturing 45% Distribution1% Other

LOCAL TRENDS

Mix of leasing and salesNotable transactionsRent GrowthClass A rents pushing north of $5/sf (light mfg related)Class A distribution space now in the upper $4/sf rangeSpeculative DevelopmentChildress KleinPatilloWestRock/SunCapAtlas CommerceMore to come???Strong demand for particular product typesLight manufacturing20,000 50,000 SF conditioned space

Source: JLL

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Case Study: GERBER CHILDRENSWEARMarket Impact?$33mm in investment100-125 jobsFurther reinforces/validates the Jedburg market as viable location for large distribution projectsWhy Berkeley County?Logistical advantages (proximity to Port and growth markets)Favorable business climateAvailable economic incentivesOperational cost efficiencies to be achieved

Why Rockefeller MWV Foreign Trade Zone Park?Speed to market/site readinessConfidence in Development teams ability to deliverCostsConnectivity to future Exit 197 along with Nexton amenities and housingClass A environment and neighboring tenants help to ensure long term valuation of asset

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STRENGTHS

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WHAT DO COMPANIES WANT?-Site readiness-Attractive business environment (taxes, incentives, permitting)-Labor Pool (cost, availability, education, skill level, training)-Infrastructure/global access (transportation infrastructure, energy costs, intermodal capabilities, certified sites)-Quality of life

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THREATSWorkforcePerception among site consultantsPerfect our value proposition backed by factsQuantify via labor study

Infrastructure Needed: $1.4B per year unt