Colorado Business Economic Outlook Forum

Paul Kluck, SIORFirst Vice PresidentCBRE

CBRE | Page 2

Regional Distribution: Percentage of U.S. Population Reached Within 500 Miles

CBRE | Page 3

3.2MSF

5.3%

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2006 2007 2008 2009 2010 2011 2012 YTD

MSF

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Vaca

ncy

Completions Net Absorption Vacancy

Industrial Supply & Demand TrendsMetro Denver

CBRE | Page 4

Denver Industrial Rental Rates

$5.88

$5.20

$5.40

$5.60

$5.80

$6.00

$6.20

$6.40

$6.60

$6.80

$7.00

2006 2007 2008 2009 2010 2011 2012 YTD

Rental Rate

CBRE | Page 5

2012 Major Industrial Transactions

TENANT / BUYER ADDRESS SF TYPE

CoorsTek 4455 Table Mountain Dr 336,606 Sale

Rocky Mountain Bottle Co. 16200 Table Mountain Pky 227,132 Renewal

Goodwill Industries of Denver 4355 Kearney St 221,677 New Lease

FedEx SmartPost 20321-20431 E 35th Dr 200,000 New Lease

Ford Motor Company 4401 Florence St 186,078 Renewal

OnTrac 5000 Lima St 151,929 New Lease

Tolmar 1201 Cornerstone Dr, Windsor 144,293 Sale

Condit Exhibition 5151 Bannock St 107,524 New Lease

Natural Grocers 4403 Table Mountain Dr 107,134 New Lease

Precision Building Systems 445-475 W 53rd Pl 100,750 Renewal

CBRE | Page 6

Current Built-To-Suit Projects

Niagara Water 319,158 SFWin Wholesale 250,000 SF Interline Brands 319,158 SFUS Foods 400,000 SF

United Natural Foods 553,757 SF

Leprino Foods 350,000 SF ExpansionRecently

Completed

Fiberspar 165,000 SFRecently

Completed

CBRE | Page 7

Where are we in the Industrial Cycle?

Phase II - Expansion Phase III - Hypersupply

•Declining Vacancy•New Construction•Rent Growth

•Increasing Vacancy•New Construction•Rent Growth Positive but Declining

Phase I - Recovery Phase IV - Recession

•Declining Vacancy•Limited Construction•Rent Growth Negative or <Inflation Rate

•Increasing Vacancy•More Completions•Rent Growth Negative or <Inflation Rate

CBRE | Page 8

• All the signs are pointing toward a rent spike in 2013•Vacancy dropping

•Increased Absorption

•Very little, if any, spec development

•Continued BTS activity

•Tenants have been signing longer term leases to lock in low rates

•Owners have been pushing rents on renewals

FORECAST

CBRE | Page 9

Two-Buck Kluck’s 2012 Forecast

The Buck Stops Here!VTWO