National Industrial Markets Canada
NORTH AMERICAN INDUSTRIAL INVENTORIES NATIONAL RESEARCH 10 Largest US Markets & 5 Largest Canadian Markets sf (millions) 1,400 1,200 1,150 1,068 1,000 824 800 600 519 516 426 418 400 355 331 327 286 284 190 200 110 22 0 CUSHMAN & WAKEFIELD 1
NORTH AMERICAN INDUSTRIAL VACANCY RATES NATIONAL RESEARCH 10 Largest US Markets & 5 Largest Canadian Markets 14% 13.3% 12% 10.6% 9.9% 9.7% 10% 9.0% 8.6% 8.2% 8.1% 8% 7.4% 7.4% 6.1% 5.7% 6% 4.5% 4.3% 3.5% 4% 2% 0% CUSHMAN & WAKEFIELD 2
<INSERT SERVICE LINE / DEPT NAME> Canadian Industrial Market (3 LINES MAXIMUM) Vacancy Rate vs. New Supply Vacancy New Supply Rate (millions of sf) 35 14% 11.6% 30 12% 25 10% 20 8% 6.8% 6.0% 15 6% 4.2% 10 4% 5 2% 0 0% 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 8 8 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 Q 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 3 CUSHMAN & WAKEFIELD 3
CANADIAN INDUSTRIAL MARKET NATIONAL RESEARCH Vacancy Rate vs. Absorption Absorption Vacancy (millions of sf) Rate 35 14% 11.6% 30 12% 10% 25 8% 20 6.8% 6.0% 6% 15 10 4% 2% 5 0% 0 -2% -5 3Q12 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 CUSHMAN & WAKEFIELD 4
CANADATA <INSERT SERVICE CONFERENCE LINE / DEPT NAME> INDUSTRIAL DEMAND SOFTENS (3 LINES MAXIMUM) Absorption (millions of sf) 4.0 3.5 3.5 3.0 2.5 2.2 2.0 1.5 1.5 1.0 0.5 0.1 0.0 Q3 2000 Q4 2005 Q4 2011 Q3 2012 Hot Market Moderate Market Toronto Montreal Calgary Ottawa Vancouver CUSHMAN & WAKEFIELD 5
CANADATA <INSERT SERVICE CONFERENCE LINE / DEPT NAME> INDUSTRIAL RENTAL RATE COMPARISON (3 LINES MAXIMUM) Q3 2012 Average Net Asking Rents – Five Major Markets $10.00 $8.37 $8.20 $8.00 $7.58 $6.00 $5.00 $4.82 $4.00 $2.00 $0.00 Toronto Montreal Calgary Ottawa Vancouver Toronto Montreal Calgary Ottawa Vancouver CUSHMAN & WAKEFIELD 6
VANCOUVER INDUSTRIAL MARKET NATIONAL RESEARCH Vacancy Absorption Rate (thousands of sf) 9% 4,500 8% 4,000 7% 3,500 6.5% 6% 3,000 5.1% 4.8% 5% 2,500 4% 2,000 3.5% 3% 1,500 2% 1,000 1.7% 1% 500 0% 0 -1% -500 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 3Q12 CUSHMAN & WAKEFIELD 7
CALGARY INDUSTRIAL MARKET NATIONAL RESEARCH Vacancy Absorption Rate (thousands of sf) 16% 4,000 12% 3,000 8% 2,000 6.2% 4.3% 4% 1,000 2.0% 0% 0 -4% -1,000 -8% -2,000 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 3Q12 CUSHMAN & WAKEFIELD 8
CANADATA CONFERENCE CALGARY DEMAND NATIONAL RESEARCH Recent shifting momentum patterns Absorption (thousands of sf) 1,200 1,000 800 600 400 200 0 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 CUSHMAN & WAKEFIELD 9
TORONTO INDUSTRIAL MARKET NATIONAL RESEARCH Vacancy New Supply Rate (millions of sf) 16% 24 13.9% 14% 21 12% 18 10% 15 8% 12 6.1% 6% 9 4% 6 2% 3 0% 0 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 3Q12 CUSHMAN & WAKEFIELD 10
TORONTO INDUSTRIAL MARKET NATIONAL RESEARCH Vacancy Absorption Rate (thousands of sf) 16% 20,000 14% 17,500 12% 15,000 10% 12,500 8% 10,000 6.9% 6.1% 6% 7,500 4% 5,000 2% 2,500 0% 0 -2% -2,500 -4% -5,000 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 3Q12 CUSHMAN & WAKEFIELD 11
MONTREAL INDUSTRIAL MARKET NATIONAL RESEARCH Vacancy Absorption Rate (thousands of sf) 15% 10,000 13.0% 12% 8,000 8.2% 9% 6,000 6% 4,000 3.7% 3% 2,000 0% 0 -3% -2,000 -6% -4,000 -9% -6,000 -12% -8,000 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 3Q12 CUSHMAN & WAKEFIELD 12
INDUSTRIAL CAP RATES NATIONAL RESEARCH Bond yields / cap rates spreads For strongest quality assets, cap rates have compressed to near historic lows. This compression reflects the very low yields available in many other investments and very competitive lending terms. For lesser assets with vacancy or locational or physical obsolescence, however, the investment demand and pricing is much weaker Underlying industrial fundamentals have not improved nearly as much as most other asset classes and the spread between cap rates and 10-yr bond yields is highest in this asset class. Toronto Industrial Cap Rates 10% 9% 8% 7% 369 bps Industrial 6% Single-Tenant 475 bps 5% 172 bps 4% 440 bps 3% 10 yr Cda 2% Bond Yield 1% 0% Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 CUSHMAN & WAKEFIELD 13
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