CALGARY LEASING FORUM EDMONTON 2007 MARKET REVIEW OCTOBER 24, 2007 - PowerPoint PPT Presentation

CALGARY LEASING FORUM EDMONTON 2007 MARKET REVIEW OCTOBER 24, 2007

Downtown Office Downtown Office Edmonton Edmonton

Downtown Vacancy Rate (All Classes) Downtown Vacancy Rate (All Classes) 16.0% 13.8% 14.0% 13.2% 11.8% 12.0% 11.4% 10.0% Vacancy Rate 8.6% 8.0% 7.4% 7.1% 6.0% 5.1% 4.9% 4.0% 4.0% 2.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2007 F 2008 F YTD 10 Year Average - 11.5%

Downtown Absorption (All Classes) Downtown Absorption (All Classes) 350 329.9 308.7 297.3 300 257.6 Absorption in SF (000's) 250 207.0 199.8 192.5 200 165.7 150 91.3 100 50 8.9 0 2000 2001 2002 2003 2004 2005 2006 2007 2007 F 2008 F YTD

Downtown Net Asking Rents Downtown Net Asking Rents Downtown Net Asking Rents $40.00 $35.00 ent per Square Foot $30.00 $25.00 $20.00 $15.00 R $10.00 $5.00 $0.00 2000 2001 2002 2003 2004 2005 2006 2007 YTD 2007 F 2008 F $11.00 $11.00 $9.83 $9.25 $9.20 $14.80 $23.00 $30.60 $32.00 $34.00 Class 'AA' $7.23 $7.41 $8.45 $8.57 $8.33 $11.53 $15.00 $19.62 $23.00 $28.00 Class 'A' $5.36 $5.83 $5.67 $6.40 $6.93 $8.83 $13.48 $17.16 $18.00 $22.00 Class 'B' Class 'AA' Class 'A' Class 'B'

Downtown Large Blocks of Contiguous Space (> 50,000 SF) Downtown Large Blocks of Contiguous Space (> 50,000 SF) 11150 Jasper Ave – 177,300 SF Beaver House – 71,129 SF Professional Building – 210,587 SF

Top Lease Transactions – – Downtown Office Downtown Office Top Lease Transactions Property Address Tenant Size(SF) Lease Type Name ING 10130 – Enbridge 68,350 Expansion/ Building 103 Street Pipelines Renewal Revillon 10320 – Legal Aid 17,518 Expansion Building 102 Ave Society of Alberta Churchill 10015 – City of 12,220 New Building 103 Avenue Edmonton Boardwalk/ 10320 – New West 8,500 New Revillon 102 Ave Enterprise Building Property Group

Downtown Office Summary – – 2007 YTD 2007 YTD Downtown Office Summary • Vacancy decreased by 2.1% from 7.6% at third quarter of 2006 to • Vacancy decreased by 2.1% from 7.6% at third quarter of 2006 to 5.1% at third quarter of 2007. 5.1% at third quarter of 2007. • Year-to-date absorption in 2007 is 297,301 square feet. This is • Year-to-date absorption in 2007 is 297,301 square feet. This is roughly 200,000 square feet higher than at the same time last year. roughly 200,000 square feet higher than at the same time last year. • The sublease market accounted for only 74,028 (10.5%) square • The sublease market accounted for only 74,028 (10.5%) square feet of vacant space, compared to 633,606 (89.5%) square feet of feet of vacant space, compared to 633,606 (89.5%) square feet of direct vacant space at third quarter of 2007. direct vacant space at third quarter of 2007. • The economic boom in Edmonton has lead to a drop in vacancy • The economic boom in Edmonton has lead to a drop in vacancy rates and significant increases in rental rates in almost every office rates and significant increases in rental rates in almost every office class. class.

Suburban Office Suburban Office Edmonton Edmonton

Suburban Vacancy Rate (All Classes) Suburban Vacancy Rate (All Classes) 12.0% 10.8% 10.1% 10.0% 9.5% 9.3% 9.0% 8.2% 8.0% Vacancy Rate 7.0% 6.0% 5.2% 4.3% 3.9% 4.0% 2.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2007 F 2008 F YTD 10 Year Average - 10.1%

Suburban Absorption (All Classes) Suburban Absorption (All Classes) 400 364.0 350 317.4 300 Absorption in SF (000's) 269.4 240.9 235.8 250 191.0 183.5 200 150 81.4 100 48.9 46.9 50 0 200 2001 2002 2003 2004 2005 2006 2007 2007 F 2008 F YTD

Suburban Lease Rate Ranges Suburban Lease Rate Ranges $40 $35.00 $35 $30 ent per Square Foot $25.00 $25 $23.00 $20.00 $20.00 $20.00 $20 $18.00 $15 R $10 $11.00 $10.00 $10.00 $10.00 $10.00 $8.49 $8.00 $5 $0 Whyte Ave. Southside Eastgate 149 Str. West End 124 Str. Kingsway

Suburban Large Blocks of Contiguous Space – – Suburban Large Blocks of Contiguous Space New Developments (> 50,000 SF) New Developments (> 50,000 SF) 51st Avenue Business Centre – 80,000 SF Commerce South Office Park (Building D) – 74,000 SF (Building E) – 68,000 SF The Steppes – 73,250 SF 91 st Street & Ellwood Drive – 50,000 SF

Top Lease Transactions – – Suburban Office Suburban Office Top Lease Transactions Property Name Address Tenant Size(SF) Lease Type Commerce 8615 – 51 Colt 74,000 New South Office Ave Engineering Park Coronation 14310 - Capital 35,000 New Plaza 111 Health Avenue YottaYotta 6020 – 104 YottaYotta 28,520 Renewal Street Coronet 8403 - Flint Energy 16,280 Expansion Building Coronet Road

Suburban Office Summary – – 2007 YTD 2007 YTD Suburban Office Summary • Vacancy decreased by 3.6% from 7.9% at third quarter of 2006 • Vacancy decreased by 3.6% from 7.9% at third quarter of 2006 to 4.3%% at third quater of 2007. to 4.3%% at third quater of 2007. • Absorption in 2007 YTD is 190,950 square feet. • Absorption in 2007 YTD is 190,950 square feet. • At third quarter of 2007, the sublease market increased in size • At third quarter of 2007, the sublease market increased in size to 31,278 square feet from 22,240 square feet at third quarter to 31,278 square feet from 22,240 square feet at third quarter of 2006. of 2006. • Rental rates have increased dramatically in the last year from • Rental rates have increased dramatically in the last year from an average of $11.54 at third quarter of 2006 to $14.47 at third an average of $11.54 at third quarter of 2006 to $14.47 at third quarter of 2007. quarter of 2007.

Industrial Industrial Edmonton Edmonton

Industrial Availability Rate Industrial Availability Rate 8.0% 7.5% 7.4% 7.0% 6.6% 6.4% 6.4% 5.8% 6.0% ate 5.0% Availability R 4.0% 4.0% 3.0% 1.9% 1.7% 1.7% 2.0% 1.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2007 F 2008 F YTD 10 yr. Average = 3.9%

Industrial Absorption Graph Industrial Absorption Graph 4,500 4,190.0 4,115.7 4,000 3,633.3 3,412.7 3,500 Absorption in SF (000's) 3,116.6 3,000 2,500 1,863.1 2,000 1,369.8 1,500 1,211.0 1,000 529.5 500 95.1 0 2000 2001 2002 2003 2004 2005 2006 2007 2007 F 2008 F YTD

Average Net Lease Rates Average Net Lease Rates $8.77 $8.80 $8.90 $9.00 $8.00 $7.40 $7.00 ent per Square Foot $6.00 $5.00 $4.85 $4.70 $5.00 $4.60 $4.50 $4.25 $4.00 $3.00 R $2.00 $1.00 $0.00 2000 2001 2002 2003 2004 2005 2006 2007 2007 F 2008 F YTD

Top Lease Transactions – – Industrial Industrial Top Lease Transactions Address Tenant Tenant Size(SF) Industry 12810 – 170 Kuehne & Nagel Transportation 400,000 Logistics Street 67 Avenue & Alberta Oil Manufacturing 121,000 67 Street Tool 15423 – 131 XS Cargo Warehouse 108,000 Avenue 50 Street & SS Inc. Distribution 90,529 Whitemud 4108 – 84 CoLinx Distribution 66,000 Avenue

Industrial Summary – – 2007 YTD 2007 YTD Industrial Summary • The Edmonton industrial market absorbed 905,724 SF in the third quarter of • The Edmonton industrial market absorbed 905,724 SF in the third quarter of 2007 causing YTD absorption to reach 3,633,324 SF. 2007 causing YTD absorption to reach 3,633,324 SF. • Average asking net lease rates have increased in the third quarter and now • Average asking net lease rates have increased in the third quarter and now sits at $8.77 PSF. The highest rents are once again in Nisku/Leduc, with sits at $8.77 PSF. The highest rents are once again in Nisku/Leduc, with the lowest rents being found in the Northeast. the lowest rents being found in the Northeast. • Overall availability rates have dropped significantly from 3.0% at third • Overall availability rates have dropped significantly from 3.0% at third quarter of 2006 to 1.9% at third quarter of 2007. quarter of 2006 to 1.9% at third quarter of 2007. • The industrial construction in Edmonton is at record levels. 737,273 SF was • The industrial construction in Edmonton is at record levels. 737,273 SF was added this quarter, with another 3.2 million SF under construction. A further added this quarter, with another 3.2 million SF under construction. A further 3.7 million SF of industrial space is currently proposed. 3.7 million SF of industrial space is currently proposed.

Retail Retail Edmonton Edmonton

Overall Retail Vacancy Rate Overall Retail Vacancy Rate 16% 14% 12.3% 12% 10% ate Vacancy R 8.2% 8% 6.1% 6% 4.9% 4.1% 3.7% 3.5% 4% 3.2% 2% 0% 2000 2001 2002 2003 2004 2005 2006 YTD 2007