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Raleigh-Durham Fourth Quarter 2011

Industrial Market Snapshot

www.cassidyturley.com

Recovery took hold in 2011 for Raleigh-Durham Warehouse/Flex

ProductWr

With 197,000 square eet o positive net absorption in 2011, the Triangle industrial market experienced

positive momentum or the rst time in a ew years. Activity in the ourth quarter was positive, albeit

modest, as 51,000 square eet o positive net absorption occurred. The vacancy rate crept down as a

result to 20.7 percent, with the majority o the vacancy located in older, Class B product. The positive

demand over the year is encouraging news or the market and suggests that businesses in the region

are growing once again.

The East Wake submarket, which is the Triangles second largest and home to the largest concentration

o new product, led the way in terms o demand over the year by posting 169,000 square eet o

positive net absorption. Somewhat surprisingly, RTP/I-40, the Triangles largest submarket, posted

negative net absorption o 238,000 square eet in 2011. RTP/I-40, which is nearly ully built out in

terms o industrial development, typically commands the highest rental rates in the market, which is

one reason the submarket has lost traction in recent quarters to lower-cost alternatives in other

submarkets around the market. The vacancy rate in RTP/I-40 has historically been in the single digits

and, with a limited amount o available big blocks, vacancy will likely return to equilibrium levels over

the next several quarters.

Wr Frc

In all likelihood, 2012 will look pretty similar to 2011, with slow and steady growth occurring in themarket

The RTP/I-40 submarket will likely rebound, as companies within and around Research TrianglePark continue to grow

Investment sales activity is expected to be healthy but may fall short of the robust volume themarket witnessed in 2011

Fx

Ater a rather dismal year in 2010, the Triangle fex market rebounded in 2011, recording 297,000

square eet o positive net absorption. As a result, the vacancy rate tightened considerably, decreasing

rom 18.4% to 17.2% over the past our quarters. The majority o the net absorption occurred during

the rst hal o the year behind airly sizeable leases such as Sensus Metering, TearScience, Kenstral

Heights Charter School and the Employment Security Commission o North Carolina. Also contributing

to the overall improvement in undamentals has been the increased velocity among the marketssmaller users (

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www.cassidyturley.com

d FrSenior Vice President

Managing Principal

3110 Edwards Mill Road

Suite 210

Raleigh, NC 27612

Tel: 919.789.4255

Fax: 919.789.0268

Email: David.Finger@cassidyturley.com

The inormation contained within this report is

gathered rom multiple sources considered to be

reliable. The inormation may contain errors or

omissions and is presented without any warranty

or representations as to its accuracy.

Copyright 2011 Cassidy Turley.

All rights reserved.

C tr ir Mrk sRaleigh-Durham Fourth Quarter 2011

ab C tr

Cassidy Turley is a leading commercial real estate services provider with more than 3,400 proessionals in more

than 60 oces nationwide. The company represents a wide range o clientsrom small businesses to Fortune

500 companies, rom local non-prots to major institutions. The rm completed transactions valued at $18 billion

in 2010, manages 455 million square eet on behal o private, institutional and corporate clients and supports

more than 25,000 domestic corporate services locations. Cassidy Turley serves owners, investors and occupiers

with a ull spectrum o integrated commercial real estate servicesincluding capital markets, tenant representation,

corporate services, project leasing, property management, project and development services, and research and

consulting. In 2010, the rm enhanced its global service delivery outside o North America through its partnership

with GVA. Please v isit www.cassidyturley.com or more inormation about Cassidy Turley.

suBMaRKettotal

BldgsinventoRy

suBlet

vaCant

diReCt

vaCant

vaCanCy

Rate

CuRRent net

aBsoRption

ytd net

aBsoRption

undeR

ConstRuCtion

aveRag

asKing R

Wr

RTP/I-40 73 10,803,732 309,174 1,298,571 12.02% (656) (237,936) 0 $4.55

E. Wake County 84 6,130,382 46,680 1,061,395 17.31% 53,000 169,024 0 $4.45

US 1/Capital Blvd 59 4,058,832 33,000 1,209,699 29.80% 24,202 137,749 0 $4.45

Other Submarkets 91 6,680,718 405,475 2,166,274 32.43% (25,555) 127,968 0 $4.15Fx

RTP/I-40 104 6,079,618 85,000 1,007,674 16.57% 48,166 223,531 0 $9.95

E. Wake County 47 1,472,865 24,500 258,727 17.57% 3,440 8,459 0 $8.70

US 1/Capital Blvd 116 4,136,699 19,478 656,753 15.88% (34,734) 3,460 0 $8.50

Other Submarkets 193 4,714,511 24,390 900,710 19.11% 15,967 61,849 0 $7.65

B prr t

Total Warehouse 307 27,673,664 794,329 5,735,939 20.73% 50,991 196,805 0 $4.38

Total Flex 460 16,403,693 153,368 2,823,864 17.21% 32,839 297,299 0 $8.90

total industRial 767 44,077,357 947,697 8,559,803 19.42% 83,830 494,104 0 $6.06

Key Lease Transactions 4Q 11

Key Sales Transactions YTD

pRopeRty sF tenant tRansaCtion type suBMaRKet

4400 emrr 92,900 unC h l Rtp/i-40

4400 emrr 89,000 px tcm l Rtp/i-40

1000 Mm W 34,000 Rc sm l e Wk

400 i a 26,000 Cm Fr Rw Rtp/i-40

800 nr grf 25,200 Crr exr us sb e Wk

eR prmr prk 24,700 Zrc Rw (Fx) Rtp/i-40

Rrc tr-Cr 22,500 Cr ofc Xc l Rtp/i-40

o prk Cr 18,133 Q-e Crr l (Fx) Rtp/i-40

800 C dr 15,000 l1 arscc, ic. l (Fx) Rtp/i-40

pRopeRty sF selleR/BuyeR pRiCe suBMaRKet

grf nr 397,332 dk R $31,000,000 e Wk

im B2001 tW axr

308,964 gRC drm, llC $21,000,000 Rtp/i-40

Crp i 324,536 dk R $17,500,000 Rtp/i-40

1757 tW axr 230,580 dk R $12,912,000 Rtp/i-40

440

40

40

40

9

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15

10

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12

2

3

5

6

8

4

9

13

7

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4RaleighDurhamInt. Airport

ir sbmrkRaleigh / Durham

1. Orange County2. North Durham

3. Central Durham4. South Durham5. RTP / I-40 Corridor6. Cary7. Southern Wake County8. Eastern Wake County

9. West Raleigh10. US 70 / Glenwood Ave.11. Six Forks Road12. Falls of Neuse Road

13. US 1 / Capital Blvd14. Downtown Raleigh

15. Cameron Village

Asking rents converted to Triple Net

B tx = C tr trc