INDUSTRIAL PROPERTY REPORTNORTH COUNTY SAN DIEGO

www.colliers.com/carlsbad

Q1 2013

$.68 nnnAVERAGE RENTAL

RATES / SF

$97 AVERAGE SALE

PRICES / SF

77K sfNET ABSORPTION (YTD)

77K SF (Q1)

9.8%VACANCY RATE

52M sfMARKET SIZE

CARLSBAD 13.3% 14.9M SF / 484 BUILDINGS

• Vacancy rate continues to inch downward at slow but steady pace with 19,737 SF of net absorption

• ViaSat leased a 37,000 SF R&D building at 2290 Cosmos Ct. within walking distance of main campus

• Anchor Audio, an owner-user, purchased a 31,000 SF building in the CRC for $131.00/SF

• Last two remaining 10k SF buildings at Spectrum Flex sold for $119 & $123/SF in shell condition

• Sale prices should continue to increase due to limited supply, options remain limited for large users above 75,000 SF

ESCONDIDO 4.8% 7.2M SF / 636 BUILDINGS

• Absorption and vacancy were at during Q1 2013

• Lease activity was slow, but rents have improved 25% from their low point

• Sale activity was slow, but sale prices have increased 20% from the lows

• Good mix of building sizes for lease

• Low inventory of For Sale buildings

• Dr. Bronner is relocating to Vista and has put their 33,000 SF Escondido building on the market for sale

• San Diego Classic Cars has vacated their 28,000 SF building at 1155 Industrial

• Expect an increase in tenant and buyer activity during Q2 2013

OCEANSIDE 14.9% 8M SF / 394 BUILDINGS

• Oceanside maintained the highest industrial vacancy among the ve North County submarkets

• Activity is picking up in all size ranges

• Several build-to-suit proposals are being negotiated in the market

• North County investors purchased the bank owned property at 2515 Industry Street

• Land is selling again at $11.50 - $12.50 SF

• Temporary shut down of Sprinter light rail hurting employees

SAN MARCOS 7.4% 8.6M SF / 490 BUILDINGS

• Under 5,000 SF was the most active segment of the market 16 leases signed during Q1

• Great activity in the 8,000 range with three leases completed and one in progress

• San Marcos posted 40,000 SF of net absorption to reduce its vacancy 50 BPS

• Limited supply and functional obsolesce make it di cult for a company to nd space larger than 20,000 SF

in San Marcos

VISTA 7.0% 13.4M SF / 530 BUILDINGS

• Vista extends its steady decline in vacancy to nish Q1 2013 at 7% (100 BPS lower than Q1 2012)

• Lease rates continue to rm up as sale prices in some size ranges move higher

• Investor purchases far outpace (4 to 1) owner-user purchases as investors bet on near term sale price and lease rate

increases due to lack of supply

• Supply of buildings for sale in the 10-15k range is plentiful (9 options); while other size ranges

are in short supply

= VACANCY

TRANSACTION ACTIVITY - Q1 2013

SALES ACTIVITY

# PROPERTY NAME/ADDRESS City BUYER TYPE SIZE SF SALE PRICE PRICE/SF

1 5931 Darwin Court Carlsbad Owner-User 31,200 $4,094,545 $131.24

2 2712 Gateway Road Carlsbad Owner-User 10,586 $1,305,750 $123.58

3 2710 Gateway Road Carlsbad Owner-User 10,583 $1,259,377 $119.00

4 1215 Paci c Oak Place Escondido Owner-User 17,503 $1,874,000 $107.00

5 2340 Meyers Avenue Escondido Owner-User 13,767 $1,342,000 $97.50

6 2515 Industry Street Oceanside Investor 40,028 $1,887,500 $47.15

7 3540 Seagate Way Oceanside Investor 14,890 $1,119,200 $75.16

8 2611 Business Park Drive Vista Investor 128,531 $10,145,000 $78.93

9 1390 Engineer Street Vista Investor 41,944 $4,625,000 $110.27

10 2525 Birch Street Vista Investor 32,512 $2,475,000 $76.13

Total 341,544 $30,127,372

Average 34,154 $97

SALE ACTIVITY - LAND

# PROPERTY NAME/ADDRESS City BUYER TYPE SIZE SF SALE PRICE PRICE/SF

11 Rancho Del Oro Business Park Oceanside Owner-User 3.63 Acres $1,951,235 $12.34

12 Paci c Coast Business Park Oceanside Owner-User 9.65 Acres $5,044,248 $12.00

LEASING ACTIVITY

# PROPERTY NAME/ADDRESS City TENANT NAME SIZE SF TERM EFF RATE/SF

1 2290 Cosmos Court Carlsbad ViaSat 37,328 Con dential Con dential

2 2081 Las Palmas Drive CarlsbadCustom Marking &

Assembly14,845 65 $0.740 NNN

3 1335 Park Center Drive VistaDr. Bronner's

Magic Soap118,597 120 $0.595 NNN

4 1390 Engineer Street Vista E World Recyclers 41,944 60 $0.693 NNN

5 2525 Birch Street Vista Reser's Fine Foods, Inc 32,512 63 $0.700 NNN

6 1350 Specialty Drive, Ste B-D Vista Athleisure, Inc. 18,724 64 $0.670 GRS

7 975 Poinsettia Avenue Vista Hesham Kamil 14,176 39 $0.450 GRS

8 1216 Liberty Way Ste B Vista Youngdale MFG 12,133 72 $0.770 GRS

Total 290,259 NNN GRS

Average 64,502 70 $0.68 $0.63

AT A GLANCE | Q1 2013 | INDUSTRIAL | NORTH COUNTY

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prepared by ADAM MOLNAR, GREG LEWIS

TUCKER HOHENSTEIN & MIKE ERWIN, 760 438 8950