INDUSTRIAL MARKET REVIEW Bill Throne, SIOR, CCIM, ALC First Vice President

ndustrial Market Review

EXECUTIVE SUMMARY

Vacancy rate finally below 10% Trend line: Steady drop over last five years Peninsula the star of 2013 Question: Any ‘drivers’ out there for industrial?

EXECUTIVE SUMMARY

WORLD; U.S. INFLUENCES

Panama Canal update: 2015 or later? National industrial demand: Supply Chain driven? Defense Spending / Sequestration World economy / Political uncertainty

354.5

322.2

326.2

278.8

230.8

268.8

306.3

309.4

328.5 0

50100150200250300350400

200520062007200820092010201120122013

National Historic Leasing Activity

TOP U.S. INDUSTRIAL MARKETS: 2013 LEASED

Greater Los Angeles: 35,766,051 sf Chicago: 30,861,300 sf Inland Empire: 30,496,242 sf Dallas/Ft. Worth: 28,275,842 sf New York/ NJ: 25,695,080 sf

National Historic Absorption

-48.9 14.2

75.9 146.0 111.9 94.4 -6.4 -125.1

13.1 94.4 95.1

117.2 -150-100

-500

50100150200

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

HAMPTON ROADS REGIONAL NEWS

Tolls and trucking Rt. 460 Improvement project Port of Virginia Institutional investing in Hampton Roads

LOCAL INDUSTRIAL RESULTS:

Repositioning of industrial properties Good: Healthy Submarkets / small in demand Good: Quality rents/ rising rents Bad: Building pricing continues to fall Bad: Construction costs high / no spec Leasing activity and absorption holding steady

2013 WINS

Overseas: Grandwatt Electric / Smithfield Local: Hampton Farms, Southampton Huntington Ingalls Blackstone / IndCor investments Port advantage…commodities

2014: BIG THINGS AHEAD?

Continued drop in vacancy rates Market rents strengthening Good submarkets will get better Another big box, please? It is getting better!