Industrial Panel Industrial Lease Vacancy Vacant space in the city - PowerPoint PPT Presentation

Edmonton Real Estate Forum 2018 Industrial Panel

Industrial Lease Vacancy Vacant space in the city is constricting 8.0% 6.5% 6.3% 7.0% 6.0% 5.0% 6.0% 5.0% 4.0% 3.0% 2.0% Historical Average = 4.0% 1.0% 0.0% 2012 2013 2014 2015 2016 2017 Q1 2018 • Lease vacancy began 2018 at 5.0%, a year over year decrease of 1.5%. • Strong leasing has occurred over the last four quarters, driving down overall vacancy in the market and in almost all submarkets. • Sublease vacancy dropped below 1 million square feet at the end of 2017, a level unseen since 2015, and now sits at 868,712 square feet. • Sale vacancy has contracted as well to 1.0%. 2018 Real Estate Panel Discussion | Cushman & Wakefield Edmonton

Key Indicators Q1 2018 12-MONTH Edmonton’s industrial market Q1 2017 Q1 2018 FORECAST has seen significant growth in the past year as the market LEASE recovers from the downturn. 6.5% 5.0% VACANCY Increased construction, RATE lowered vacancy, and average asking rents that are rising for the first time in two years are NET positive signs for landlords and (333,475) 320,769 ABSORPTION industrial real estate investors (SF) heading into 2017. UNDER CONSTRUCTION 288,783 1,567,462 (SF) AVERAGE $9.51 $9.30 ASKING RENT

Absorption Trailing averages and deal velocity 600,000 $12 500,000 400,000 300,000 2015 Absorption -922,675 200,000 2016 Absorption -573,211 $10 2017 Absorption 1,498,066 100,000 2018 Absorption YTD: 320,769 0 -100,000 -200,000 -300,000 $8 2016 2017 2018 Trailing Average Absorption, SF Asking Net Rents Real Estate Forum 2018 | Cushman & Wakefield Edmonton

Sale History Quarterly sale volume of industrial buildings, condos, and land Real Estate Forum 2018 | Cushman & Wakefield Edmonton

Land Price Acheson forerunner in Edmonton’s economic recovery Price Per Acre Overall Sales $80,000,000.00 $1,600,000.00 $70,000,000.00 $1,400,000.00 $60,000,000.00 $1,200,000.00 $50,000,000.00 $1,000,000.00 $40,000,000.00 $800,000.00 $30,000,000.00 $600,000.00 $20,000,000.00 $400,000.00 $10,000,000.00 $200,000.00 $0.00 $0.00 Southeast Northeast Northwest Acheson Leduc/Nisku Southeast Northeast Northwest Acheson Leduc/Nisku 2015 2016 2017 2015 2016 2017 Real Estate Forum 2018 | Cushman & Wakefield Edmonton

Current Spec Availability Current Available Spec Southeast Northwest Edmonton 962,645 Sq. Ft. 655,053 Sq. Ft. Southeast Edmonton 655,053 Sq. Ft. Northwest 962,645 Sq. Ft. Northwest Southeast Spec built space that is available makes up 27.0% of all directly vacant space in the Southeast market and 41.4% of all directly vacant space in the Northwest market. 2018 Real Estate Panel Discussion | Cushman & Wakefield Edmonton

Key Market Analysis Real Estate Forum 2018 | Cushman & Wakefield Edmonton

INDUSTRIAL INVESTMENT ACTION PLAN Plan Update EDMONTON REAL ESTATE REGIONAL AND ECONOMIC DEVELOPMENT FORUM 2018 ECONOMIC INVESTMENT AND DEVELOPMENT 10

ACTION PLAN INDUSTRIAL DISTRICTS REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT 11

ACTION PLAN TAXABLE ASSESSMENT BASE REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT 12

INDUSTRIAL ACTION PLAN OVERVIEW ACTION: 3 ACTION 1: ACTION 2: IMPROVE IMAGE EXPLORE ALTERNATIVE IMPLEMENT FLEXIBLE & REPUTATION INFRASTRUCTURE COST STANDARDS SHARING MODEL ACTION: 5 ACTION: 4 ACTION: 6 INCREASE SPEED INTRODUCE CAPITAL LEVERAGE BUSINESS TO MARKET PROJECT PRIORITY FACILITATION RETENTION FRAMEWORK ACTION: 9 ACTION: 8 ACTION: 7 PRIORITIZE INDUSTRIAL IMPLEMENT ECO- INCREASE EETP INFRASTRUCTURE INDUSTRIAL READINESS PROJECTS (WINTERBURN) PRINCIPLES REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT

NEXT STEPS – 2018 ACTION PLAN DELIVERABLES Business Retention and Infrastructure Cost Sharing ● ● Expansion Model Context Sensitive Design ● EETP Area Structure Plan ● Standards Amendments Capital Prioritization ● Eco-Industrial Principles ● Criteria and Guidelines Speed to Market ● Capital Budget Profile ● REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT 14

NEXT STEPS – 2018 ACTION PLAN DELIVERABLES THANK YOU QUESTIONS REGIONAL AND ECONOMIC DEVELOPMENT ECONOMIC INVESTMENT AND DEVELOPMENT 15